High Risk Ach Processing - It Can Be Done

The automated clearing house is a system of electronic debit and credit

. It is a batch oriented process. Its workings are guided and regulated by an oversight organization which sets a standard of security, efficiency and reliability. The process has become a part of the everyday dealings of businesses, financial institutions and consumers. It has simplified the process of buying and selling and virtually eliminated the need for paper billing or paper check writing in many instances. Not everyone is created equal in the eyes of the clearing house, however. Some merchants fall into a category that requires what is called high risk ACH processing.

If a merchant finds itself categorized in a level of increased risk, they may find themselves unable to take advantage of many of the benefits of making electronic business transactions. High risk ACH processing I something many banks will not take on. If they do, the merchant is often charged at a much higher rate. Merchants often find themselves securely lodged between the proverbial rock and a hard place. The majority of customers want to use credit cards or at least want the option to use them. Businesses that cannot process payments this way are at a severe disadvantage in the marketplace.

As rules and regulations have become increasingly strict, more and more businesses are falling into a position of seeking out ways to conduct even high risk ACH processing to remain competitive with customers. The standard automated clearing house methods work fine for low risk type industries.

Those in property management, the government or insurance industries have no problem accessing the lower rates and going about their business through the normal channels. Returns and chargebacks simply aren't an issue in these types of arenas. Therefore, banks assume a lower threat and pass it on via lower rates.

The story is quite different for a merchant seeking high risk ACH processing. Those whose businesses engage in online sales or something similar do have a high potential for returns. Even the ones with the best efforts in customer service and quality products cannot avoid having some items returned for a refund. This creates havoc for the banking end of the system and the headache is passed down to the merchant in the form of higher rates or flat out refusal to deal with their company. The ACH governing body, NACHA, also has instituted hard to reach standards regarding rates of returns or chargebacks. Companies in this situation who are seeking solutions can learn more now!

by: Troy Truman

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