The world is going digital, and the check payments industry has embraced this change enthusiastically. The development and advancement in today’s lifestyle, as well as the onset of a new breed of eCommerce sites and social networks, offers consumers numerous ways to socialize, be entertained, and do business. The ability to multitask has become a norm, which makes it daunting for any individual, to a point that it actually takes more time and effort. This is the main reason why most businesses opt for a process that is far more efficient and less time consuming. With this in mind, it is only natural that we will look for the same efficiency online?
Why Accept Checks?
So perhaps you are not entirely wrong in asking – do I really need to accept check payments for my business? Consider the following points:
Checks still have a consumer base.
Yes, they still do! Take into account the factors that may affect a customer’s preference for such, usually a person’s education and age. Studies show that there are generally four main factors that play a role in the consumer’s behavior. These factors include cultural factors, social factors, personal factors, and psychological factors.
In the recent study conducted, where they analyzed merchant activity in the areas of invoicing, payment & remittance, and credit & collections, it was noted that 83% of the respondents currently receive customer payment in the form of paper checks, 71% receive payment via Automated Clearing House (ACH), and 52% receive payment via Credit Card. Alternatively, when asked which payment method they prefer, 63% of those same respondents chose ACH, 25% selected paper checks, and 9% selected Credit Card.
Even though the volume of check payments is less than half of what it was 10 years ago. That is 23% of check payment business from people who, for whatever reason, still prefer using checks. It is difficult to find statistics on check usage broken down by age; however, anecdotal evidence suggests a direct correlation between check usage and age. In other words, older people who grew up using checks are more likely to continue to use them until now.
This being so, businesses which deal mainly with seniors, such as a doctor’s clinic, may benefit greatly from offering check acceptance. However, businesses which deal mainly with younger people might also find it an advantage to offer a check-payment option. Here’s a thought – even though younger people are unlikely to use checks themselves, their parents or grandparents may be willing to make purchases on their behalf. Either way, it’s a win-win situation to add ACH Processing and Check 21 processing as part of your accepted payment methods.
Old habits die hard as they say.
People find it difficult to change their accustomed behavior. This may well be a reflection of the fact that successful businesses tend to have established processes for check payment acceptance, and will need to be presented with a compelling reason to change before they will even consider doing so. Newer businesses themselves use checks for making payments, partly because they take slightly longer to debit the payer’s account than other forms of payment, and in so doing gives developing businesses a bit of breathing space.
ACH Processing – Most Efficient Way for Accepting Checks
Because of the factors mentioned, many brick and mortar businesses continue to accept checks, and many online businesses have either followed suit, or are considering doing so.
There are essentially three ways of accepting check payments.
The first way is to have the customer mail in a check, and submit it to the bank in paper form. This process is open to problems with the mail, and is also the slowest method of processing checks.
The second way is to have the customer mail in the paper checks and then use an electronic check-reader to create a scanned image of it, also known as a Check Image. This electronic image is then submitted to the bank for clearing.
The final and most efficient way is to move to an e-checks solution, or ACH processing. In a nutshell, the customer enters the relevant details, such the check number, routing number, and account number on an online form, which is then processed electronically via the Automated Clearing House.
An ACH processing solution allows customers the convenience of paying directly from their bank account, while completely eliminating problems with the mail, and allowing more modern e-retail companies to continue using the paperless payment methods they already support. It is a convenient payment option for recurring transactions, such as bill payments (although, it is important to have a standing consent from the customer for all subsequent debits).
While checks may seem like an old-fashioned means of payment, they still have a loyal following amongst both consumers and businesses. These days, every business, regardless of industry, faces stiff competition. By deploying ACH processing and Check 21 as a means of payment, firms can attract customers who may be buying from a competitor for this very reason, or a potential customer who may forego buying altogether for lack of check acceptance.
Offering a wide range of payment acceptance options is a smart way of doing business, and GFC Financial can provide the best payment solutions for your business. From electronic check processing to credit card acceptance and opening a merchant account, we offer customized payment solutions that best suit your business, regardless of what industry you are in.
Talk to us today to find out how ACH Payment Processing can grow your business.