ACH Payment Processing: Four Ways to Streamline Operations

By Payliance | 03/14/19

Without an electronic payment model such as ACH payment processing, fund disbursal can be a lengthy and cumbersome process. The ACH network provides a cost-effective framework where lenders can quickly and efficiently deliver funds to borrowers and collect repayments.

ACH payment processing not only empowers lenders to quickly send funds to borrowers but is also generally a lower cost option than debit card, delivering a cost-effective and streamlined payment solution. ACH processing empowers lenders to streamline business operations in these four important ways:

 

Same-Day ACH

Same-day ACH credits* allow lenders to provide funds to borrowers in the same banking day that a loan is approved. Same-day ACH enables lenders to quickly deliver borrowers funds on short notice at a lower cost than a wire or card payment, streamlining the lending process in emergencies.

This important to lenders in a variety of ways: 

  • This speed increases customer satisfaction.
  • It provides a competitive advantage for online lenders.
  • This process reduces cash handling at retail locations.
  • Same-day ACH saves money by being cheaper than writing checks for a borrower to cash.

* A transaction must be done in a timeframe prescribed by the ACH network and the payment processor to qualify as a same-day transaction.

 

Greater Control Over Cash Flow

With ACH payment processing, lenders can control the timing of disbursements for borrowers and have access to transparent monthly reporting to improve quarterly forecasting.

With full visibility into each transaction in a way that that traditional paper check systems don’t allow, lenders are provided with a more detailed view into issues such as a borrower that has not received funds. This allows issues to be fixed more quickly, to ensure positive cash flow.

 

Automate Recurring Payments

By automating recurring electronic payments, lenders can automatically launch ACH transactions to reduce the time it takes to receive repayment from borrowers, enabling lenders to get their funds repaid quicker.

Lenders also save valuable time with recurring ACH payments by eliminating the planning and manual tasks required to collect a monthly payment from borrowers. This includes collecting and processing a physical check or paper cash or scheduling repayment. Since recurring payments are facilitated electronically, lenders can reduce fraud and eliminate the chances of a lost or stolen check, saving time associated with reconciling these errors.


Increase Visibility of Settlement & Account Activity

The ACH network provides lenders with valuable, accurate data quickly to help to increase visibility into borrowers by providing information including:

  • Why returns occur
  • Indicates there aren’t enough funds in an account
  • If an account has been closed
  • If the account doesn’t exist
  • If the account has been frozen

 

By collecting this information, lenders can reduce fraud and build a borrower profile that can assist in making future lending decisions. By including this information when making lending decisions,  organizations can improve their cash flow and better forecast bad debt.

Efficiencies gained through ACH payment processing empower businesses to be more productive by streamlining processes and decreasing costly inefficiencies.

Payliance is a fintech partner that specializes in flexible ACH processing and same-day ACH processing solutions specific for lenders. Our ACH payment processing solutions make it fast, easy and secure to process and control recurring and one-time payments and disbursements – streamlining operations and saving valuable time and money while ensuring compliance.

Request to speak with our fintech experts to streamline ACH processing and begin collecting payments quicker.

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