What Is an ACH Deposit?

An ACH payment is a process by which funds are electronically transferred from one bank account to another using the Automated Clearing House (ACH) network. On the receiving end, an ACH deposit is a method of receiving funds directly into an account, commonly used for income, refunds or other types of deposits. ACH deposits are initiated as ACH credits, where the funds are pushed from the payer’s bank account to the recipient’s bank account.

 

How an ACH Direct Deposit Works

The following is the typical process for making an ACH deposit:

1. Authorization: The recipient provides the payer with their bank account information, including the account number and routing number. This information is necessary to identify the recipient’s bank and the specific account where the deposit will be made.
2. Payer initiation: The payer, whether it’s an employer, government agency, business or other entity, initiates the ACH deposit through their bank or a payment processor. They provide the recipient’s bank account information, the deposit amount and any additional information required by their bank or payment service provider.
3. ACH network processing: The payer’s bank or payment processor submits the ACH deposit request to the ACH network. The ACH network serves as the central system that facilitates the electronic transfer of funds between banks.
4. Originating Depository Financial Institution (ODFI): The payer’s bank acts as the ODFI and is responsible for initiating the ACH deposit on behalf of the payer. The ODFI submits the deposit request to the ACH network and debits the payer’s account for the deposited amount.
5. Receiving Depository Financial Institution (RDFI): The recipient’s bank, known as the RDFI, receives the ACH deposit request from the ACH network. The RDFI verifies the recipient’s account and ensures that it matches the account information provided in the deposit request.
6. Deposit posting: Once the RDFI verifies the recipient’s account and the deposit details, the funds are credited to that account. The amount of the ACH deposit is added to the recipient’s account balance.
7. Notification: Depending on the recipient’s preferences and the bank’s notification system, the recipient may receive a notification, such as an email or mobile alert, informing them of the successful deposit.

 

What Role Do ODFI and RDFI Play in ACH Deposits?

In the context of ACH deposits, the ODFI and RDFI play distinct roles in facilitating the electronic transfer of funds through the ACH network. Here’s an overview of the roles and responsibilities of each:

The ODFI is the financial institution that initiates the ACH deposit on behalf of the payer. The ODFI can be a bank, credit union or other financial institution that is an ACH participant. Responsibilities of the ODFI include:

• Receiving the ACH deposit request from the payer
• Verifying the payer’s account to ensure sufficient funds for the deposit
• Submitting the ACH deposit request to the ACH network
• Debiting the payer’s account for the deposited amount
• Acting as the primary point of contact for the payer regarding ACH deposit transactions

The RDFI is the financial institution where the recipient holds their bank account. The RDFI receives the ACH deposit request from the ACH network and processes the deposit on behalf of the recipient. Responsibilities of the RDFI include:

• Receiving the ACH deposit request from the ACH network
• Verifying the recipient’s account information provided in the deposit request
• Crediting the recipient’s account with the deposited funds
• Acting as the primary point of contact for the recipient regarding ACH deposit transactions
• Providing account statements and notifications to the recipient related to the deposit

Both the ODFI and RDFI play vital roles in ensuring the secure and efficient transfer of funds in ACH deposits. Collaboration between the ODFI and RDFI, along with the ACH network, enables seamless electronic transfers of funds through the ACH system.

 

ACH vs. Direct Deposits

ACH payments and direct deposits share several similarities due to their common reliance on the ACH network for electronic fund transfers. Here are some key similarities between ACH payments and direct deposits:

• Electronic fund transfers: Both ACH payments and direct deposits involve electronic transfers of funds between bank accounts. They eliminate the need for physical checks and provide a more efficient and secure method of transferring money.
• ACH network: Additionally, ACH payments and direct deposits utilize the same ACH network infrastructure for processing transactions. The ACH network acts as the intermediary that facilitates the transfer of funds between the payer’s and recipient’s financial institutions.
• Bank account information: To initiate ACH payments and direct deposits, the payer or initiating entity requires the recipient’s bank account information, such as the account number and routing number. This information is necessary to identify the recipient’s bank and ensure the funds are deposited into the correct account.
• Recurring payments: ACH payments and direct deposits can both be used for recurring transactions. For example, recurring bill payments can be set up as ACH payments, while recurring income streams like payroll or government benefits can be delivered through direct deposits.
• Cost savings: Both ACH payments and direct deposits offer cost savings compared to traditional paper-based methods. They reduce the expenses associated with check printing, mailing and manual processing, resulting in more efficient and cost-effective payment and deposit processes.
• Convenience and efficiency: ACH payments and direct deposits also provide convenience and efficiency for both payers and recipients. They eliminate the need for physical checks, reduce administrative workload and offer faster access to funds.

Additionally, there are some differences between ACH payments and direct deposits. These key differences include:

• Purpose: ACH payments encompass a broader range of transactions, while direct deposits specifically refer to receiving funds into an account.
• Direction: ACH payments can be either ACH debit or ACH credit, whereas direct deposits are always ACH credits.
• Usage: ACH payments are more versatile and can be used for various payment purposes, while direct deposits are primarily used for recurring income or benefit payments.

 

How Long Does an ACH Deposit Take?

The time it takes for an ACH deposit to complete can vary depending on several factors, including the participating financial institutions, the ACH network’s processing schedule and any specific timing requirements set by the initiating entity. Here’s a general timeline to give you an idea of the ACH deposit process:

1. Initiation: The initiating entity, such as an employer or government agency, submits the ACH deposit request to their financial institution (ODFI). This typically occurs shortly before the desired deposit date.
2. ODFI processing: The ODFI processes the ACH deposit request, verifies the payer’s account and submits the deposit to the ACH network. This step usually takes place on the same day the request is received from the initiating entity.
3. ACH network processing: The ACH network acts as a central clearinghouse, routing the deposit request to the receiving financial institution (RDFI). This step can vary depending on the ACH network’s processing schedule.
4. RDFI processing: Upon receiving the deposit request from the ACH network, the RDFI credits the funds to the recipient’s bank account. The timing of this step can vary, but it typically occurs on the same day the RDFI receives the deposit request.

 

Is ACH Direct Deposit Replacing Paper Checks?

ACH deposits have increasingly been adopted as a more efficient, secure and convenient alternative to paper checks for various transactions. Here are some reasons why ACH deposits are replacing paper checks:

1. Faster availability of funds: ACH deposits typically result in faster availability of funds compared to paper checks. With ACH, funds are electronically transferred and deposited directly into the recipient’s bank account, eliminating the time required for mailing and check clearance.
2. Reduced processing time and costs: ACH deposits reduce the time and costs associated with printing, distributing and reconciling paper checks, as well as manual processing and check handling fees.
3. Enhanced security: Additionally, ACH deposits provide increased security compared to paper checks. Electronic transfers minimize the risk of lost or stolen checks, and the funds are electronically transferred between financial institutions, reducing the potential for physical tampering or fraud.
4. Convenience and efficiency: ACH deposits offer convenience for both payers and recipients. Payers can initiate payments electronically, eliminating the need for physical check preparation and mailing. Recipients receive the funds directly into their bank accounts, avoiding the inconvenience of depositing paper checks in person or through remote deposit methods.
5. Improved recordkeeping: ACH deposits also provide a digital record of the transaction, making it easier for both payers and recipients to track and reconcile payments. This eliminates the need for manual recordkeeping and simplifies financial management.
6. Eco-friendly and sustainable: Finally, ACH deposits contribute to environmental sustainability by reducing the use of paper checks and envelopes. By transitioning to electronic transactions, companies and individuals can minimize their carbon footprint and support sustainable practices.

 

Choose CSG Forte for ACH Payments

At CSG Forte, we provide a range of financial services, including ACH payment solutions. When you choose CSG Forte, you can accept ACH payment processing and implement online ACH payments. Benefits of working with us include:

• Saving time
• Reducing costs
• Enhanced security
• Improving cash flow
• Sending payments with ease
• Receiving payments in just days
• Getting same-day payment options
• Tracking funds via transfer confirmations
• Easy implementation process

Contact the CSG Forte team to learn more or get started today.

How to Accept ACH Payments for Small Businesses

The Automated Clearing House (ACH) is the network that oversees transfers from one financial institution to another. When you accept ACH payments as a business, you allow your customers to transfer funds from their accounts to yours. Leveraging online ACH payments can be a valuable practice for all types of businesses.

 

How to Receive ACH Payments

To begin processing ACH payments, follow the simple steps below.

 

Step 1: Set Up an ACH Merchant Account

The ACH network oversees electronic transfers from one bank account to another. To process these transactions, you must have an account with the ACH network to identify your business and access customer bank accounts for withdrawals. Typically, you’ll create this account through an e-payment platform.

When you set up your account, you must provide various information to prove your identity as a merchant. This information includes:

• Certificate of incorporation
• Federal tax ID
• Proof of company address
• Valid ID for company owners

Additionally, you’ll have to provide an estimated processing volume of your electronic fund transfers.

 

Step 2: Request Customer Authorization

After verifying your company through the ACH network, you can request customer authorization, which is essential to receive ACH payments. Authorization requirements exist to protect consumers from unwarranted account withdrawals from businesses. You have a few options to retrieve valid authorization from a customer. You can:

• Receive verbal agreement over a recorded phone message.
• Ask your customers to submit an online payment authorization form.
• Have your customers sign a physical confirmation form.

Online authorization forms will file directly to the ACH network for authorization. At CSG Forte, we simplify the authorization process with an online authorization process on our platform. Send the authorization form to your customers to complete the process in a few minutes.

 

Step 3: Create the Payment

With your merchant account and customer authorization, you’re ready to set up the payment with your customer. During the authorization process, your customer will provide the following information:

• Bank name
• Account number
• Routing number
• Customer name

You’ll use this information alongside your merchant details to set up the payment. You’ll also set the amount required for transfer. In the case of recurring payments, you will only need authorization and bank account information for your initial transaction.

 

Step 4: Submit Details to ACH Network

Your final step is inputting all information into the ACH system for the transfer to take place. You’ll rely on processing software to handle this last step. When you input the payment information, the ACH network alerts both banks involved in the transfer. From there, the customer’s bank will provide the funds requested by you, the merchant.

 

How Long Does It Take to Receive an ACH (eCheck) Payment?

ACH payments take about three to five business days to process through the network and appear in your bank account. The process takes a few days because the ACH network needs to verify the transaction. ACH batches only operate during the business week and close at 5 p.m. EST, so consider the payment’s timing when determining when it should show up in your account.

You can use Same Day ACH payments if you need a faster payment option. In these cases, ACH transactions are sent and received the same day the request is made rather than the following morning. You can expect these payments to be settled the day after submitting them.

 

The Benefits of Accepting ACH and eChecks for Your Business

When you accept eCheck payments, your business and consumers can enjoy the benefits.

Convenience

The initial authorization process for ACH payments can take as little as a few minutes for you and your customers. Once authorization is complete, your customers can send payments to you with the press of a button. These payments’ convenience is undeniable, especially for e-commerce businesses handling all transactions online.

More convenient, digital payment methods improve the consumer experience for all types of products and services. While you can enjoy the convenience of eliminating paper checks, your customers can skip writing them out and mailing them to you. Happier customers lead to more business and a positive reputation all around.

Cost

Processing physical checks and counting out cash can be an expensive process with the manual labor involved. Additionally, credit and debit card charges can be on the pricier side. ACH payments typically come with low, flat rates per transaction, allowing your business to offer convenient payments without overextending your financial resources.

You can reinvest the money you save on administrative overhead into your business and its growth. The reduced manual labor can also decrease the need for more internal team members, saving money on payroll—even as you grow.

Protection

The ACH network is highly regulated and secure to keep money safe as it transfers from one bank account to another. While many layers of security protect financial data as it moves from institution to institution, there are also clear reasons for disputing charges. ACH charges are not like credit card charges that can be disputed for any reason.

Consumers want to know their bank account information is safe during authorization, and your third-party ACH provider should have that covered. With CSG Forte, tokenization replaces all important data with a token that is generated randomly and has no intrinsic value. Our end-to-end encryption and compliance with financial regulations provide the trust and data protection you and your consumers are looking for.

Efficient

Online payments through the ACH network lend themselves to automation. Integrate your payments platform with financial management software to keep track of all money coming in and going out via ACH transfers. With the help of automation, your team can greatly reduce administrative responsibilities.

Additionally, eChecks or ACH payments are among the most common payment types used for recurring billing. Consumers can also enjoy the efficiency of money automatically taken from their accounts each month, reducing their payment responsibilities and eliminating late fees.

 

What Types of Businesses Can Use ACH Payment Processing?

Many types of businesses can benefit from ACH payment processing.

Small and Medium Businesses

Many small and mid-sized businesses understand the importance of offering convenient payment options for their customers. However, these businesses also have fewer resources than larger enterprises and wonder if they can afford the fees associated with e-payment processing.

ACH payments have relatively low fees compared to credit card processing and far less administrative overhead than processing checks. When you’re looking for convenient payment options at a reasonable price, ACH payments are the way to go.

Integrated Software Vendors

Integrated software vendors (ISVs) provide software as a service (SaaS) that depends on a subscription model. These businesses are ideal for ACH payments because recurring payments are simple to set up.

When ISVs collect payments from several sources in multiple formats, managing finances can be complex. These businesses also often operate with projected income rather than actual income, so staying organized and tracking the money coming in is essential. Online payments with ACH transfers unify payments from clients and make financial tracking easy.

Enterprises

Larger companies often have significant customer bases to match. With payments coming from many different sources, tracking earnings and reconciling payments can become complex. ACH payments provide the efficiency of automation, allowing enterprises to manage their incoming payment volume.

Government

Donors, constituents and more send money to government organizations. Whether an organization is municipal, state or federal, accepting payments from multiple sources can be challenging. With ACH transfers, organizations can securely house their payments under a single system while reducing administrative strain on internal teams.

 

How Can CSG Forte Help You?

CSG Forte offers a complete, end-to-end payments solution with Dex. Our platform allows you to seamlessly and securely accept transfers from your customers, empowering your business with payment flexibility and reduced administrative responsibilities. See what CSG Forte can do for you, and get started with us today.

How Long Does an ACH Transfer Take?

Automated Clearing House (ACH) transactions allow for electronic money transfers directly between banks. This funds transfer method is secure due to data protection measures. It is also convenient because it requires no cash or checks changing hands and takes only one to three days to complete. These advantages make ACH transfers appealing to businesses and individuals.

 

What Is an ACH Transfer?

ACH is an electronic funds transfer (EFT) method that involves moving money between banks without using cash or checks. During these transactions, money passes from one financial institution through the Automated Clearing House and ends in another bank. ACH technology has many uses, including direct deposits for payroll, online bill pay and digital payment services.

Here’s how an ACH transfer works:

1. Authorization: Before making a payment or requesting money, you must contact the second party and ask permission to use this payment method to send funds.
2. Payment details: After the second party agrees, your business can begin a transfer with a request to your bank.
3. Batch processing: The request goes to your bank, which batches it with other transactions to send to the Clearing House or Federal Reserve at scheduled times during the day.
4. Transaction submission: Those institutions receive the request, confirm that the account has sufficient funds to make the payment and send transactions five times daily.
5. Money transfer: Funds move from the paying account to the receiving account.

This transfer method moves all funds electronically. The originating business can complete a transaction in two ways: ACH credit and debit. A credit means your business receives funds. Your company might use this for collecting payment for a service. A debit means you make a payment. Payroll is an example of how your business might use debits.

 

How Long Does an ACH Payment Take?

In general, ACH transfers take about one to three days to complete. ACH payment processing time may depend on the type of transaction, the policy of various financial institutions involved in the transfer and the time when your business submitted the request. Debit and credit transfers have differing requirements for processing speed:

• ACH credit: A transaction must be processed in two days when your business receives funds.
• ACH debit: A transaction must be processed in one day when your business sends funds.

Receiving depository financial institutions (RDFIs) can hold transactions to confirm funds which may take up to three days. If you need faster money transfer, you can use same-day ACH, which allows guaranteed transfer within one day as long as you submit the request during business hours. A request added after hours will transfer the next day.

Here’s an overview of each day of the money transfer process.

Day Zero

The process begins when you send your money transfer file to a bank. As long as your business sends the request before the last batch leaves, the request will move to the ACH network the same day.

Day One

The ACH network sends the transaction to a customer’s bank. It receives the file, debits or credits their account, and credits or debits the funds to the originating depository financial institution (ODFI).

Day Two

The payer’s bank must notify the ACH network of any failures within two days after payment submission. This day marks the payment failure cutoff.

Day Three

If the transaction fails, your bank will receive a notification from the ACH network and communicate it to you. Depending on the reason for failure, your business may initiate a new transaction or find a different method for paying or receiving funds.

 

How to Streamline ACH Transactions

Transfer times often vary due to factors outside your control, but you can do a few things to make transfers happen quicker and with fewer errors. These include:

• Submitting files in the proper format: With an incorrect file, it may take some time for your bank to review the information, discover errors and contact you to resolve the issue.
• Confirming customer payment details: Incorrect information leaves a challenging path for financial institutions to follow, while a transfer with correct details makes moving money easier.
• Ensuring sufficient funds: For debit payments, check that your account has enough money to complete transfers. For credits, maintain open communication with customers to confirm they have the funds to pay you.

 

When Does the Receiver Collect Payment?

The receiver collects the payment within three days of submitting a transfer request. Factors that influence this timeline include:

• Payment submission time: Payment leaves financial institutions in batches, so you must submit transactions before the last batch leaves for the day to increase your chances of fast processing.
• Vendor transfer process: Differing originating and receiving financial institutions have varying rules and transfer processes—some might prioritize security over speed, leading to a slower funds transfer process.
• Errors found in payment: An incorrectly entered account number or another similar error might mean your business must resubmit the transaction, and the receiver will wait longer for payment.

 

How Same-Day ACH Reduces the Wait

While ACH saves time compared to physical money like cash or checks, other digital transfer methods sometimes have shorter timelines. To solve the problem, financial institutions have worked together to create batch processing. With batch processing, your money will move within the same day as long as the initiating party submits the request by 4:45 p.m. EST.

Same-day ACH works because organizations like Nacha, ODFIs and payment processors have worked together to improve processing speeds. Any credit, debit or return transactions will process the same day when your business chooses same-day ACH.

The transaction limit for same-day ACH has also raised to $1 million, meaning your business can now make more significant payments with shorter wait times. Your business can optimize cash flow and keep money moving so your company, employees and customers gain access to the necessary funds in a timely manner.

 

Manage ACH Payments With CSG Forte

ACH payments make moving money more convenient by offering a digital method for transferring funds within days. With CSG Forte’s payment processing platform, your business can leverage ACH payments to make money management easier and faster. A network of over 20 banks means your business can send and receive money seamlessly. Get started with CSG Forte online to make payment processing better than ever.

What to Consider When Choosing a Payment Gateway?

Integrating a payment gateway into your process can be simple, but knowing more about it can provide the confidence you need to help you identify a trustworthy provider.

 

What Is a Payment Gateway?

A payment gateway is a technology merchants use to accept customer credit and debit card payments. The term payment gateway is broad and covers point-of-sale (POS) terminals in brick-and-mortar stores and online payment portals for e-commerce.

As modern consumers, most of us know what it’s like to interact with a payment gateway. Whether we’re buying groceries or ordering clothing online, we interact with these gateways to securely pay merchants with our cards. Many consumers expect these payment gateways as cash and checks slowly become a thing of the past. Businesses must keep up with consumer demand and provide payment gateways for greater customer satisfaction.

 

How Does a Payment Gateway Work?

Payment gateways act like bridges between merchants and financial institutions. When a payment gateway plays a role in a transaction, it passes credit card information from the merchant to the bank with the help of the credit card network. The general process follows these steps:

1. A buyer uses a credit card to purchase a product from a merchant.
2. The payment gateway pushes the transaction information to the merchant’s bank.
3. The gateway also identifies the credit card network and routes the transaction information to the right payment processor.
4. The payment processor sends the payment request to the bank that issued the credit card.
5. The issuing bank uses fraud detection to determine whether the transaction is legitimate and confirm that the buyer has enough credit to complete the transaction.
6. The issuing bank approves or rejects the transaction and sends the decision to the payment gateway and the merchant’s bank.

A payment gateway is responsible for supporting an issuing bank’s payment authorization. When a transaction is authorized, the issuing bank puts the required funds on hold. On the cardholder’s end, this hold looks like a pending transaction. The merchant must reconcile payments and send a batch capture for all pending credit card transactions to gain access to the funds.

It’s essential to note that a payment gateway is not the same as a payment processor, though both play a role in a transaction. A payment gateway is responsible for collecting customers’ credit card information and encrypting it for processing later. A payment processor takes this information and charges the customer’s financial institution or credit card provider.

 

Main Types of Payment Gateways

Payment gateways include three types—on-site, redirects and front-end checkout. Each of these types offers benefits and challenges, and one may be better suited to your needs than the others.

On-Site

With an on-site payment gateway, checkout and payment processing occur on the merchant’s site. The on-site approach gives you extensive control but requires more responsibility. When a merchant is solely responsible for the front and back end of payment processing, the company must consider security features, system updates and user experience.

Complete customization is one of the most notable benefits of an on-site payment gateway. Merchants control the user experience, so they can create a seamless payment process for buyers. However, upkeep will require regular attention, and businesses should be prepared to provide that effort.

On-site payment gateways are not an accessible option for every business because of the resources it takes to maintain them. Larger enterprises usually have access to this type of e-commerce payment gateway, but it may be out of reach for small and medium-sized businesses.

Redirects

With redirect payment gateways, customers are taken to a new page to complete their transactions. Redirects can be ideal for companies that lack the time or resources to manage on-site payment processing. Merchants have no obligation to keep up with updates or user experience metrics. However, businesses also have no control over the purchasing experience.

Front-End Checkout

With front-end checkout, buyers work through the checkout process on the merchant’s site, but the payment processing occurs through the gateway’s back end. Checkout will include reviewing items for purchase and entering a shipping address. Payment processing includes entering credit card information and waiting for transaction approval.

This payment gateway option is the moderate option among the three main types because it gives the merchant some level of control through their checkout process and eliminates back-end processing responsibilities. However, merchants should be aware that a gateway’s back-end process will influence user experience even when it’s out of their control.

 

Choosing a Payment Gateway for Your Business: What to Consider

Integrating a payment gateway into your checkout process can offer a boost to the customer experience and make it easier for your team to manage payments. Plenty of payment gateways are available on the market, but not every provider will offer the best solution for your investment. When exploring your options, consider the following questions to make an informed decision about the payment gateway for your business.

1. How Much Does Your Business Want to Spend on a Payment Gateway?

Cost is one of the most significant considerations when implementing a payment gateway, especially if you run a small or medium-sized business with limited resources. When researching payment gateways, you’ll want to look into a provider’s fee structure. There are three main cost areas to learn more about—setup costs, transaction fees and administration expenses.

While credit cards are a popular payment method, they also come with higher transaction fees. If you’re not prepared to take on these fees for the volume of purchases on your site, you may want to consider ACH debit transfers. This payment method has lower transaction fees, making it easier to manage financially.

2. How Secure Is the Payment Gateway?

Security when moving money back and forth should play a major role in your payment gateway selection. While you want to trust you’re getting the money you earned, you also want to protect your customers when they make purchases on your site. Fraudulent activity connected to your business can detract from a positive reputation.

During your payment gateway research, look for providers who comply with Payment Card Industry (PCI) data standards. This compliance is essential when working with credit and debit cards because those methods require data encryption. When a customer enters their credit card information, the gateway should encrypt the data to prevent hackers from accessing it during the transaction.

Another aspect of payment gateway security is tokenization. This practice creates a unique token with no intrinsic value for every set of sensitive information to make it inaccessible to outsiders.

3. What Level of Support Does the Payment Gateway Offer?

While payment gateways can be valuable tools for businesses, they can also pose challenges. If your gateway creates issues for your customers, this impact on the buying experience can influence your company’s reputation. Access to reliable support from your gateway provider helps maintain those positive customer experiences.

Support for your gateway can take many forms. Strong customer support offers various resources and methods of contact for troubleshooting needs. Considerations for support include:

• Self-service troubleshooting
• Over-the-phone customer support
• Platform resources for updates and bug fixes
• General guides for working with the gateway

4. Does the Payment Gateway Offer Automatic Recurring Payments?

Every payment gateway is built differently, and some will have more functions than others. Handling recurring payments is a notable benefit for companies that offer subscription models for their products or services. If subscriptions are a part of your business, your payment gateway should provide recurring payment capabilities.

A payment gateway that supports recurring payments will store buyers’ credit card numbers to charge on a regular basis. Many gateways offer this feature, but you will need an online merchant account to access it. You may consider the flexibility of payment options. For example, ACH debit capabilities can be an ideal option for some customers, and they may support a higher volume of recurring payers within your customer base.

5. Can You Use the Payment Gateway With Your Existing Systems?

Using a payment gateway that doesn’t integrate with your other systems can complicate the administrative side of your business. When searching for a payment gateway, look for a provider that will help you integrate the gateway with your existing billing and accounting software for greater ease of use.

Integration support is an excellent way to improve your overall efficiency. When your applications work well together, you can automate more processes and reduce administrative burdens for your team.

 

How Can CSG Forte Help You?

CSG Forte is a payment gateway that offers the payment flexibility consumers want. With the ability to take card payments online, at the point of sale and over the phone, every consumer can complete purchases in a way that’s comfortable for them. Our payments platform offers impressive capabilities, including tokenization, user-friendly bill presentment and many other features.

With CSG Forte, your business can join the modern world. Our solutions support large enterprises and small to medium sized businesses. With recurring payment capabilities, our platform also supports subscription-based services. See what our platform can do, and get started today.

How Can ACH Processing Benefit Your Business?

Automated Clearing House (ACH) payment processing continues gaining popularity as businesses and customers recognize this system’s many benefits. ACH processing is an electronic payment method that allows companies and individuals to send and receive money.

These digital transactions offer significantly lower costs and added convenience for recurring transactions. As a result of ACH’s benefits, many businesses are leaving paper checks and other payment methods behind in favor of this electronic option.

 

Overview of ACH Payments

ACH payments are a digital method for sending and receiving funds. These transactions pass through the Automated Clearing House, an electronic funds transfer (EFT) system established by the Bureau of the Fiscal Service, letting businesses and individuals send credit and debit card payments.

Businesses often use these payments to cover employee payroll or receive money for customer payments for goods and services. In many cases, electronic payments must obtain an authorization request from a credit card network or issuing bank. ACH payments instead go through the Federal Reserve or a clearinghouse to secure payments.

Once the request passes through one of these organizations, the receiving depository financial institution (RDFI) posts the payment to the requestor’s account. Businesses save money and time making money transfers when using ACH instead of credit card authorization. They can accept or send payments up to $1 million daily, and the system recognizes revenue faster, so you can receive or send funds in as little as a few hours.

 

Are ACH Payments Safe?

As a government-established electronic payment method, ACH has federal regulations for safety in money transfers. Nacha, a non-profit organization, also regulates and runs this money transfer network. These controls make fraud rare, though not completely unlikely.

Here are a few additional ways your business can reduce the risk of fraud:

• Choose a trusted payment provider: Ensure your provider complies with Nacha rules. You can look for Nacha-preferred partners for the most security.
• Use microdeposits: The best payment providers offer microdeposits to verify recipient identity. These are two small deposits made to an account before formal transactions begin.
• Seek information protection: Your provider should utilize tokenization and encryption to disguise sensitive data. These controls ensure only the intended recipient can interpret the data you send.

 

Benefits of ACH Payments for Businesses

Many businesses adopt ACH payments for ease, security and speed. This electronic money transfer method continues to grow in popularity, with companies carrying out 5.94 billion transactions using this method in 2022. Businesses compare these transactions to previous payment methods like paper checks and see distinct ACH payment benefits, leading them to adopt the system.

Lower Costs

Compared to electronic and paper payment methods, ACH transactions are one of the most cost-effective money transfer options. Credit card companies require network fees for processing transactions. These fees range from 1.5% to 3.5%. Checks also cost $2.01 for internal expenses like financial institution fees and $4 for external costs like personnel. Paper checks are often mailed, which is an additional expense when you factor in materials and postage. In comparison, ACH has a median internal spending of $0.15 and an external cost of $0.25.

Speed

ACH payments have faster processing times. Like all electronic processing methods, ACH is faster than payments like checks, which must be mailed and manually entered. Checks might also get lost, extending the time before the recipient receives money in their account.

ACH transactions also process faster than many electronic transfer methods, sometimes within a few hours on the same business day. You can also schedule transactions for one or two business days away. With same-day transfers, you can ensure that payments settle the day your business sends them out.

Minimal Human Error

Human error can cause payment delays and impact organizations’ cash flow. With computer-automated payment through ACH processing, you reduce mistakes like incorrect payment amounts or errors in recipients’ account numbers. You can set recurring payments up once, ensure the information is correct and let the transaction repeat each billing cycle without needing adjustment.

Customer Convenience

ACH payments also have many benefits for customers, including the convenience of a one-time setup. For recurring expenses like rent or a subscription service, your business can request authorization once, then continue to take payments as needed. Customers like this method because it is convenient and they will always pay on time, avoiding late fees or lapses in service. Business-to-business transactions also work well with ACH because many companies are switching to digital money management tools.

Expense Tracking

With ACH, your business can record all income electronically, and the information is more easily accessible to bookkeepers. With ACH payments you can easily view transactions online and connect them to money received or disbursed.

 

Collect ACH Payments With CSG Forte

With CSG Forte’s complete payments solution with ACH processing, we make it easy for your business to send and receive digital payments. Learn how you can start accepting ACH payments and Get Started with CSG Forte today.

Your Guide to POS Debit and Point of Sale Charges

When you accept particular types of credit or debit card payments, your business and customers need an easy way to distinguish different types of transactions to separate the real ones from fraudulent ones. This is where merchant descriptors come in. Merchant descriptions explain various transaction types on a customer’s bank account or credit card statements.

Two common descriptors are point of sale (POS) and POS debits. Learning the difference between various descriptors will allow your business to make accurate and easy-to-understand descriptors for various transactions customers make.

 

What Is POS Debit?

A transaction appears as a POS debit in a customer’s account when individuals use a debit card to purchase merchandise at a cash register or other point of sale using a personal identification number (PIN). This transaction differs from a direct benefit transfer (DBT) because those transactions don’t require a PIN entry. DBT often appears for transactions like contactless payment or e-commerce situations.

When customers make purchases, the transaction posts to their account immediately, though it may process at the end of a business day or later.

 

POS vs. POS Debit

Though the terms POS and POS debit may seem interchangeable, they have distinct meanings.

POS Meaning

In general, POS refers to the point of sale. A POS transaction is any transaction where a customer uses a card to purchase an item at a store’s point of sale, including a cash register or similar payment area at the front of a store. It may also include online sources. Payment methods in this category consist of several types, from debit and credit cards to gift cards.

POS Debit Meaning

POS debits are a more specific category within point-of-sale transactions. A transaction appearing as a POS debit in a customer’s account means that a customer used a debit card at a cash register with the PIN.

Transactions with debit cards have consistently risen in popularity in the decades since this payment method’s adoption. Today, these cards account for about 55% of noncash transactions. This popularity means businesses and customers need a reliable and transparent way to record these payments. One way is through a POS debit classification.

 

Debit Card vs. Credit Card Transactions

Although the physical process of paying with a debit card is quite similar to that of a credit card, these payment types have several differences that create a need for different descriptors in your system.

Where the Money Comes From

With a debit card transaction, the money comes directly from a customer’s checking account. When customers pay with credit cards, the money comes from a credit card network, and the customer will pay the card association back later for charges incurred.

Risk Involved

The risk involved is a significant reason for the distinction between the two payment types. Credit cards have higher fees because customers are using credit to complete the transaction, as opposed to money they have available in their checking account. Different classifications ensure that merchants pay the proper fees for each credit or debit card transaction.

Card Issuer

Debit cards come from banks where customers have checking accounts. Usually, the card falls under a central issuer, like Mastercard or Visa. These larger issuers typically offer credit cards too. Most people access credit cards through either their financial institution or directly from an issuer.

 

How Do Merchant Descriptors Work?

Merchant descriptors appear on bank or credit card statements to inform customers about their transactions. Customers know these descriptors as the bank statement description. There are three types of descriptors:

Static

These descriptors never change and are also known as default or hard descriptors. Your business will likely set this descriptor once and leave it as is. Whether a customer pays with a debit card, mobile payment or credit card, they will see the same descriptor.

Dynamic

This descriptor will change depending on the purchase method and other factors. This category includes POS debit and POS transactions. Some payment processors also allow for changes based on the type of purchase made, like a particular service.

Soft

These descriptors often appear in a different portion of a customer’s bank account after a customer authorizes a transaction but before it settles. In many cases, it looks the same as the static descriptor. In some cases, it may appear under the payment service provider’s name instead of the merchant name, confusing customers.

 

Best Practices for Merchant Descriptors

Merchant descriptors inform customers about the purchases they make so they can determine whether any may be fraudulent. Customers who cannot identify a transaction’s origin from the descriptor might dispute the charges, even when they are legitimate, costing your business money. This situation is known as a chargeback or friendly fraud and causes significant losses for businesses.

To avoid confusion, you can follow a few standard practices for displaying transactions on a bank statement:

• Set up your payment system: When you get a new payment system for the first time, establish understandable descriptors from the beginning. If you have had the same processing system for some time, go back and ensure descriptors make sense.
• Include the necessary information: Make your business easily identifiable by including a shortened name, state and ZIP code. You could also add a phone number or a URL.
• Think of the customer: You may want to set descriptors that work well for your payment processing needs. Instead, determine what would be most useful for the customer to know.
• Shorten the information: Most bank or credit card statements only display about 20 to 30 characters. Ensure you fit all necessary information in that count and test different banks or credit card companies to see how each shows your description.

 

Protecting Your Business With Reconciliation

Your business likely manages many transactions daily. Like your customers, you want to ensure that the amounts your POS system records match those recorded by your bank. POS transactions appear in your accounts with merchant descriptors in the same way they do for customers. Here’s how you can reconcile them:

1. Review sales and refunds in your POS system.
2. Compare this list to bank statements to check for differences.
3. Identify transactions that don’t match.
4. Contact your bank to resolve any issues.

Depending on the number of transactions you handle, you might perform reconciliations as often as every day to as little as once a month.

 

Choose CSG Forte for Payment Processing

Whether you handle POS transactions online or in person, CSG Forte’s payment processing system provides confident purchase management for customers and businesses. Learn more about how our reliable payment solution lets you accept point-of-sale transactions and maintain logical merchant descriptors for debits and other payment types. Get even more information about our solutions when you get started today.

Check Verification Guide for Businesses

Ensuring your business receives payments on time from customers is paramount to business operations. Whether your business deals with checks, eChecks or both, verification procedures can confirm that the payment is valid before you accept it. Check fraud is a prevalent problem for both consumers and businesses, resulting in significant losses.

Fortunately, verification procedures or systems can lower the chances that your business will experience payment fraud. Businesses can employ manual verification techniques but using an electronic process can provide automatic confirmation without requiring a time-consuming phone call or bank visit for every check.

 

What Is Check Verification?

Check verification confirms that a customer’s check and bank account are valid before transaction completion. This process ensures that payments will process as expected without waiting days to see whether funds clear in your account.

Verification procedures cover in-person and online transactions using checks and eChecks. With a developed process in place, you can secure your business profits and potentially prevent fraud.

 

Why Is Verification Necessary?

Electronic and paper checks comprise a significant portion of payment methods, with checks accounting for 14.5 billion payments and Automated Clearing House (ACH) debits for 16.6 billion. As these payment methods are still common, they are often a target for fraud. It’s recommended that businesses employ verification procedures because they can:

• Protect against losses: Confirmation lets you spot fraud before a customer leaves without paying for your products or services.
• Decrease returned checks: Ensure that customers have enough money in their accounts to cover the costs before you accept payment.
• Prevent payment evasion: With immediate verification, you can confirm whether a check will clear before you deposit it into your account, meaning you can verify payment before giving customers a product or service.

 

How to Verify a Check

Businesses looking to verify funds on a check may turn to several methods. The most basic way is by calling the customer’s financial institution. This process includes:

1. Inspect the check’s front to determine which financial institution issued it.
2. Search for the bank’s official website and a customer service number online. Don’t use the customer service number printed on a check, as it could be fraudulent.
3. Call the online service number and say you wish to verify a payment received.
4. Provide the account and routing numbers listed on the front of the check. These numbers are typically along the bottom, with the routing number first and the account number second.
5. Give the dollar amount written on the check.

Once you provide this information, the bank can confirm whether the check is valid. Depending on the bank’s security rules, the customer service representative may only state that the account exists, not the amount in the customer’s account. Other banks may verify a check’s funds, the account number and issuer and whether the account is active.

Some banks deny phone confirmation to protect customer privacy. In these cases, you must visit the nearest bank branch in person. You can also go to your bank, but the customer’s bank will give you a faster answer and more secure information.

Signs of Fraud

While your best course of action is to confirm validity with a bank or online fraud detection service, you can also look for warning signs like:

• Suspicious behavior: Actions like requesting cash for a check often indicate fraud.
• Check’s appearance: Authentic check backs include security features like a complicated pattern and the text “original document.”
• Microprint: Check backs also have tiny words printed in their design that often appear as solid lines or dots when they don’t come from a bank.

Businesses that frequently accept checks should set rules to reduce the chances of payments bouncing or fraud. These regulations might include requiring employees to report signs of fraud or keeping a business record of customers with previously rejected checks.

eCheck Verification

Electronic checks are created and sent to businesses online. As such, they have a different verification process. Procedures like calling a bank may not be necessary because eChecks process faster than physical checks, usually within 24 to 48 hours. Customers who use eChecks have less time to remove funds from their accounts, which would cause a check to bounce.

eCheck processing services often have built-in securities as well. The processor will verify a check online so you don’t need to. eChecks are also encrypted to keep information safe when sent online. These checks are much more challenging to steal and use fraudulently.

 

Sources for Check Verification

Sources for verification include:

• Your business bank: Your company’s bank can contact a customer’s bank to confirm the check information.
• A customer’s bank: The bank name is listed on the front of the check.
• Third-party services: These methods usually consist of an online service that confirms information based on check data.

You may verify checks using any of these options or a combination of them, but whichever you use, ensure it is legitimate. For example, don’t use a customer service number printed on a check. Instead, find the correct number on the bank’s website.

If your business uses merchant services, your service provider may include verification services or link you to another party that does. When you work with CSG Forte as your merchant payment processor, you can get merchant payment services from us.

Is Live Check Verification Secure?

As long as you use a legitimate form of live verification, it is very secure. Immediate payment confirmation offers a higher level of security than waiting for checks to clear because you receive approval or denial within minutes.

 

The CSG Forte Check Verification Process

With CSG Forte payment processing systems, you can choose between three verification methods: Validate, Validate+ and Authenticate. With each of these options, your business can automatically authorize checks and electronic funds transfer (EFT) payments using the routing and account numbers provided. Our Validate+ and Authenticate services offer an added layers of security features.

Things We Look for

Our procedure consults proprietary databases to check for suspicious information, including:

• Bad routing numbers: The routing number is invalid or goes to a different location than it should.
• Invalid checksums: The sum on the check doesn’t match bank records.

This service also verifies that the account exists and is open and valid. Payments that do not receive a definitive response move on to a national negative check database, which includes a comprehensive list of people who have previously written a bad check or one that bounced.

Based on the data received during our information search, the system will send a message indicating whether the payment was accepted. High-risk or insufficient funds checks receive an automatic decline. Others are accepted but may face further verification for your business’s safety. With Validate+, you can configure which results should lead to an approval or decline for added control over payment processing. When using CSG Forte’s Authenticate service, businesses are also able to verify account ownership, reducing the risk of fraud even further.

 

Choose CSG Forte for Online Check Verification

Online check verification ensures your business gets the promised funds for a product or service. With immediate confirmation, your business gains peace of mind when processing checks and electronic payments. Learn more about how our Validate service from CSG Forte processes all ACH payments, including eChecks, and provides immediate denial or approval to protect your business. Discover how to get started today.

eCheck vs. ACH What Is the Difference?

Many terms exist to describe types of automatic payments and it can be hard to understand what they all mean. At a high level, the broadest category is electronic funds transfer (EFT). Automated Clearing House (ACH) payments and eChecks are two examples that fit under EFTs. eChecks and ACH are two terms often used interchangeably. However, they have distinct differences. ACH transactions include various forms such as payroll and interest, while eChecks refer only to electronic transactions completed between checking accounts.

 

What is an Electronic Check or eCheck?

An eCheck is a type of ACH payment that involves transferring money between two checking accounts. This payment method goes by several other names, including electronic check, direct debit and internet check. Many businesses incorporate eChecks into their systems to accept large amounts of money. Companies that operate solely online also benefit from eChecks because they offer customers an additional payment option for transferring funds.

eChecks function much like paper checks but have an advantage because they do not become outdated. They also process faster because they skip the manual deposit process of sending a check and waiting to bring it to a bank. Typically, eChecks process in 24 to 48 hours. Customers also get more security through eChecks than they would with traditional payment methods, making them an appealing option for those sending and receiving funds.

It’s important to note that a business must work with a processing company to use electronic check ACH transfers. eChecks require particular software for safe and effective use.

 

How Do Electronic Checks (eChecks) Work?

Unlike a regular paper check, a business making an eCheck payment doesn’t write or print information onto a piece of paper. Instead, the payer enters all information electronically from one account to the other. Typically, the payee will send an online form where customers enter their checking account information and the amount paid. Payees can also accept eChecks over the phone with recorded phone calls. This process can save time and reduce paper use, creating positive environmental effects.

Another important note is that merchants must pay a small fee to process eChecks. The price is minimal and often worth the cost due to the added convenience and savings gained by not having to print and mail paper checks.

Other potential benefits for businesses when accepting eChecks include:

• Convenience: Depositing checks at the bank can be time-consuming for customers and businesses. The use of eChecks makes it easier to facilitate transactions without requiring extensive work for administrative staff. Additionally, eChecks often clear much faster than traditional checks, allowing businesses to access funds faster.
• Cost-effectiveness: eChecks generally have lower transaction fees compared to credit card payments, making them ideal for high transactions. Due to several features implemented by the ACH network, customers who use eChecks may also be less likely to initiate chargebacks compared to transactions with credit card companies. Fewer chargebacks can help businesses avoid potential lost revenue.
• Improved cash management: Fewer administrative obstacles and faster processing times contribute to better insights into funds, particularly for businesses with tight operating margins. Quicker access to funds can help facilitate better decision-making about expenses.
• Increased customer satisfaction: Businesses that offer multiple forms of payment can access a broader range of customer preferences. Accepting eChecks can make businesses more appealing to customers looking for flexibility and ease of payment.

How eCheck Processing Works

Businesses desiring to implement eCheck processing may want a more in-depth look at how the process works. Here’s a step-by-step explanation:

1. Reach out for authorization: All ACH payments, including eChecks, require approval from both parties by sending a signed order form, speaking on the phone or filling out an electronic form.
2. Enter payment information online: To begin processing information, you must enter customer information, including the bank’s routing number, account number, name, address and federal tax identification number.
3. Confirm and submit: After filling out all necessary fields, your business should ensure all information is correct and confirm submission through the software or payment gateway.
4. Initiate transfer: Submitting the payment details to the ACH network triggers the transfer of funds and coordinates with the bank for verification and movement of money.
5. Bank verification: Once the payer’s bank receives the account information and confirms the availability of funds, they will approve the transaction for processing.
6. Process payment: Once you submit a payment and the transaction is approved, the payer’s account will automatically withdraw the amount within three to five days.
7. Receive confirmation: When the transaction is complete, both parties generally receive confirmation receipts that show the check amount and other details.
8. Record keeping: The electronic process means the parties receive electronic records, which are often easier to manage and retrieve for accounting or auditing purposes.
9. Settlement: The process is officially complete once the ACH settles the transaction with both banks.

What Is ACH Processing?

eChecks are a type of ACH payment but not the only kind that exists. Broadly, ACH refers to the Automated Clearing House, a federal EFT system run by the National Automated Clearing House Association (Nacha). The network moves money directly between banks for ease and security in transferring money. Consumers, businesses and governments use this funds transfer method.

ACH processing has two main categories—credits and debits—so you can send money to customers or request that customers pay you. Here are a few primary uses for ACH transactions:

• Refunds (including taxes)
• Interest payments
• Government benefits
• Payroll
• Employee expense reimbursement
• Mortgages
• Financing
• Direct deposits

ACH payments offer a range of advantages over other payment methods, including:

• Low transaction costs: ACH payments charge a per transaction fee, no matter the payment amount, which is significantly more affordable compared to some traditional payment methods like credit cards, wire transfers, checks or cash.
• Secure payments: ACH processing provides secure payments by facilitating direct transactions between the payer and payee without any interference from a third party. This process can help reduce the chances of fraud or payment errors like misused credit card information, cash theft or bounced checks.
• Repeatable and reversible transactions: Some electronic payment methods require customer bank account information at each transaction. ACH offers recurring payments and automated transactions for customers and businesses, helping to reduce missed payments, save time and keep private information secure. ACH payments are also reversible, which can reduce the risk of fraud.

How Does ACH Processing Work?

The ACH network connects thousands of banks and other financial institutions across the United States. When a business or individual pays or requests payment, the request gets batched with other transactions. Here’s an example of the process for ACH direct payment:

1. Receive authorization: Before your business can bill a customer, you must receive permission through an authorization form that allows you to pull money from the customer’s bank account.
2. Information collection: Next, your business must provide details about the transaction to your bank, including routing numbers, bank account information and transaction type. The depository institution in the ACH network is known as the Originating Depository Financial Institution (ODFI).
3. Collecting and batching: The ODFI collects all transaction files and forwards them to be processed. During processing, the Federal Reserve or a clearinghouse receives the batch of transactions.
4. Receiving and distribution: The institution sorts them to determine which bank the payment must come from and which bank receives it, known as the Receiving Depository Financial Institution (RDFI). The recipient’s bank account gets the transaction and reconciles both accounts, which completes the transfer process.

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eChecks vs ACH: Breaking Down the Differences  

eChecks are a specialized form of ACH transaction, so these two electronic payment types have many similarities. Both are processed electronically, use the same network for processing and require authorization before making or receiving a transfer. They also have the same transaction limit.

Though eChecks and ACH have many similarities, comparing electronic checks vs. ACH brings out a few differences, including:

• Payment time: Both electronic transfer types take about four business days to process. However, those receiving eChecks may at times wait up to five days to receive the money.
• Technology used: eChecks were not available when the ACH was first created. This payment type was added to the system after new technology was developed and requires using an eCheck service.
• Payment uses: eChecks are more specialized than ACH transactions, usually for one-time expenses. This means the banking information is not stored once the transaction is complete. ACH covers recurring costs that occur on a schedule and stores the payment information for future deductions.
• Cost per transaction: ACH and eCheck transactions typically charge fees based on a percentage of the total transaction, but the fees charged for eChecks are often much lower. ACH payments may present chargeback, reversal or return fees in some cases. Both payment types have lower costs to process than credit card transactions.

Choosing a Payment Method Between eCheck and ACH

ACH payments and eChecks offer affordability, speed and security, making them appealing money movement options for merchants and customers. You can refer to the difference between eCheck and ACH these payment types to decide which is best for your business’ needs.

For example, a recurring expense like payroll is better handled through ACH than an eCheck. Payments from customers to your business might work better with an eCheck. Companies that see benefits in both types of transactions can often get them together since they use the same system.

How Can CSG Forte Help You Process eChecks and ACH Payments 

eChecks are a secure, fast and convenient way to receive payment from customers, but you need a processor that accepts this payment type. CSG Forte offers a payments platform that accepts eChecks, ACH transactions and credit and debit cards on a single platform. Our system integrates with existing ones and can be customized to meet changing business needs.

 

Contact one of our payment experts to learn more about how our complete payments solution can benefit you. You can also explore ways to get started with our solutions.

Use Recurring Payments to Predict Your Revenue Stream

As subscription models become more popular, recurring payments are as well. A recurring payment is a regular payment for a product or service. They benefit your customers by improving their experience and are great for your company by providing a steady revenue source.

 

What Is Recurring Payment Processing?

Recurring payments are automatic charges for a product or service used regularly. The customer agrees to have their card charged automatically according to the merchant’s payment schedule. Charges are made weekly, monthly, annually or whenever the customer’s subscription needs to be renewed.

Recurring charges are divided into two types based on the amount owed:

1. Fixed recurring payment: The customer is charged the same amount every pay period, regardless of usage.
2. Variable recurring payment: The customer is charged a different amount every pay period based on usage.

A company needs a payment service provider and merchant account to accept and process these payments.

Recurring payment solutions incur some costs. A recurring payment system charges a flat monthly fee and a percentage of your transaction volume. Costs will also vary based on the capabilities you need and the credit card issuer.

 

How Do Recurring Payments Work?

A recurring payment model takes several steps to set up:

1. The customer enrolls in a recurring payment option: The customer signs up for a subscription or opts to have their credit card charged automatically based on the payment schedule.
2. The customer chooses a payment method: The customer decides which payment mode to use for their recurring payment, such as a credit or debit card.
3. The customer agrees to the terms and conditions: Recurring payment systems must be approved by the customer. When customers accept the terms and conditions, they consent to the system storing their card details and charging their account every pay period.
4. The payment details are stored: The customer provides their card details, which the payment gateway stores for further transactions.
5. The payment is processed: The customer’s credit card network and issuing bank and the merchant’s acquiring bank approve the transaction, and money transfers from the customer to the merchant account.
6. The customer’s card is charged every period: When the next payment is due, the customer will be charged the amount owed based on the card details on file. The customer will get an invoice beforehand and a payment receipt once the transaction is complete.

Once this process is complete, your business can accept recurring payments from customers and receive payments within a few business days. The payment process repeats automatically every billing cycle, only stopping if the customer stops recurring payments or ends their subscription, or if the payment details are incorrect.

 

Businesses That Use Recurring Payments and Processing

Recurring payments used to be exclusive to a small sector of products and services. Now, many businesses are implementing a subscription model and allowing customers to make recurring payments. Any company offering products or services that customers frequently need can implement a subscription service.

Invoice-based recurring payment systems are ideal for:

• Subscription services and club sales: Recurring payments can pay the service fee every period, so the customer can keep participating in the service. Examples include streaming services and magazines.
• Membership services: Companies that run invoices for services can automate payments every billing cycle. Examples of these businesses include fitness clubs, tutoring companies and dance studios.
• Service providers: Service providers are businesses that service a customer at regular intervals and charge based on time. Examples include child care, lawn care and house cleaning.
• Government and municipal services: Government organizations can take advantage of recurring payments to ensure citizens pay their taxes on time.
• Services with payment plans: Companies that charge a high-cost service often allow customers to make scheduled payments over months. These smaller payments add up to the total service cost. Recurring payments can help customers make their monthly payments.

Recurring payments for online businesses can be used for:

• Online services: Many online services charge their customers for access to their products. Examples include mobile apps, virtual service providers and Software as a Service (SaaS).
• Subscription boxes: Subscription box companies sell subscriptions to their packages online. Subscribers enroll in the service and can be charged every period before the box is shipped to them.
• Restricted content services: Some companies make special content for paid subscribers only. Recurring membership payments can help ensure those who pay for the content can access it.
• Online learning: Online schools can charge their students every payment period for access to courses and instructional materials.

 

Benefits of Accepting Recurring Payments

Businesses that implement a recurring payment solution experience several benefits. They can:

• Have a predictable revenue stream: Subscription service payments make it easy to get predictable and stable revenue every pay period. With ad-hoc billing, your revenue is inconsistent since some customers may neglect paying their bill.
• Offer several payment options: Your customers can choose from various payment methods and schedules that work for them. Being this flexible without recurring payments is more difficult to manage.
• Simplify their workflow: Recurring payments automatically process invoices and payments, so your team will have less work to do every billing cycle.
• Enhance the customer experience: Recurring payments are convenient for your customers. They can set up their payment details and let the service charges pay for themselves without doing anything manually. By paying consistently, your customers will enjoy continuous service.
• Increase customer retention: Recurring payments encourage customers to continue to use your product or service, improving customer loyalty.
• Reduce the risk of fraud: Since the payment gateway stores the customer’s payment details, the risk of fraud is reduced.

 

How CSG Forte Helps With Recurring Payment Processing 

A payment gateway is one of many ways to process a recurring payment. Payment gateways are part of the recurring payment process by storing the customer’s card details for future charges. Companies can work with a payment gateway to support transactions.

Accept and process recurring payments with the payments platform by CSG Forte. With this platform, you can schedule recurring payments with your customers and manage these payments through account verification, returns management and more. You’ll also benefit from high gateway availability and minimal downtime with our enhanced payment gateway performance.

Contact CSG Forte for more information, or sign up for your recurring payment system today.