What is an ACH Payment?
ACH stands for Automated Clearing House. An ACH payment is an electronic debit or credit transaction that enables customers to make payments from their bank accounts for mortgage loans, utilities, and other types of bills, or to receive payments from other parties. Many payment processors offer ACH payment processing options to their customers, especially for monthly- and subscription-based transactions.
ACH Payments and YapStone
YapStone leverages innovative risk management technologies that allow companies to accept ACH payments safely via the web. This enables companies to focus on their core business and avoid the hassle of accepting and issuing paper checks. They also benefit from being able to seamlessly manage the reporting and reconciliation associated with ACH transactions.
ACH Payment in Check-Dominated Industries
YapStone is focused on delivering the convenience of electronic payments by offering multiple payment solutions and payment methods, including ACH payment processing. At YapStone, we differentiate ourselves with an innovative API payment solution combined with our extensive industry experience and expertise. Partnering with YapStone means your ACH processing is in good hands.
How Does ACH Payment Processing Work?
There are a number of steps involved in accepting ACH debits, more commonly known as e-Checks, from your customers:
Step 1: User Initiates Online Payment via ACH
The user engages with information presented on one of YapStone’s web pages, payment apps or other ACH payment processing systems to pay rent, pay HOA dues, make a donation or book a vacation home rental. The user selects eCheck, from a range of online payment methods, and provides information such as name, bank account number, and bank routing number before submitting a payment.
Step 2: YapStone to Payment Processor
YapStone batches the accumulated ACH transaction details for the day’s e-check payments and transmits them to its payment processor in an ACH file.
Step 3: Payment Processor to ACH Network to User Bank
The payment processor delivers the items to its bank, known as the Originating Depository Financial Institution (ODFI), which sends them through the ACH network. The details are then relayed to the user’s bank (known as the RDFI, or Receiving Depository Financial Institution) for posting.
Step 4: User’s Receiving Bank
The e-check debits post to the user’s account. Funds are usually available to the merchant within 3-5 business days. Upon logging in, the merchant can see if e-check payments are processing, cleared or reversed. YapStone merchant reports showing details of ACH activity for the purposes of reconciliation become available at the point that ACH batches go to the bank. These include the Transaction Activity Report, Transaction Summary Report and a Recapture Statement.
Step 5: Payment Processor to ACH Network to YapStone (B)
If the transaction does not post, YapStone is notified via the same chain, with the receiving bank (RDFI) sending the e-check item back to the ACH network. The ACH network delivers it back to the ODFI/processor, which notifies YapStone that the transaction was not successful. Returned item notification can take several business days due to the fact that the ACH Network is not an instantaneous system.
Because the transaction may be returned due to non-sufficient funds (NSF), funds provided to the merchant will need to be recovered. If this happens, YapStone passes along the non-sufficient funds fee charged by the RDFI to the merchant along with the un-posted item. The NSF fee goes through the same channels as the returned item: from the RDFI, through the ACH network, followed by the ODFI/payment processor, and finally to YapStone before going to the merchant.
Why Accept ACH Payments with YapStone
Working with us you’re viewed as a valued partner rather than a customer. It’s a major reason why all types of companies of all sizes, from property management companies to vacation rental owners to non-profits, accept ACH payments through YapStone. Of course, it doesn’t hurt that we’re considered experts in the industries in which we work, not to mention our innovative payment and risk management platform and the recognition that comes from processing 8-billion dollars in electronic payments annually.