ACH transactions in Zenoti payments
Automated Clearing House (ACH) transactions are an efficient, cost-effective solution for processing recurring payments, particularly for businesses managing memberships and subscription services. Zenoti Payments supports ACH to streamline your billing operations and to ensure a seamless payment experience for you and your customers.
What is ACH?
ACH transactions transfer funds directly between banks, bypassing card networks like Visa or MasterCard. Processed in batches, they may take several days to complete and are ideal for recurring payments, especially for membership-based businesses.
Key benefits of ACH with Zenoti payments
Cost-effective: ACH transactions typically incur lesser fees compared to card transactions, making it an economical choice for businesses with large volumes of recurring payments.
Expanded payment options: ACH, as an additional payment method, allows businesses to reach customers without cards, enabling more users to purchase memberships. This increases business opportunities for membership-based services by offering flexible payment options while ensuring predictable billing cycles.
Uninterrupted membership billing: Switching to ACH for Zenoti subscription payments ensures that existing membership billing processes remain unaffected, with payments continuing smoothly and on schedule.
Accurate reporting: Zenoti offers detailed collections reports for ACH and credit card transactions, allowing businesses to track and reconcile payments effortlessly, even after transitioning to ACH.
How does ACH work in Zenoti payments?
ACH network and payment processing
The ACH network is administered by the National Automated Clearing House Association (Nacha), a trusted organization owned by a consortium of banks, credit unions, and payment processors.
Nacha enables the direct transfer of money between different banks without using paper checks, wire transfers, credit cards, or cash.
Zenoti submits ACH payment requests to Nacha through its payment processor, which then coordinates with various participating financial institutions to process the transaction efficiently. This system ensures smooth and reliable payment handling, especially for recurring transactions.
Flexible processing times
ACH transactions may take up to five business days, with processing times varying based on the banks involved. This flexibility allows businesses to align payment schedules with their cash flow needs, ensuring smooth financial management.
To enable ACH, contact your Zenoti representative.
Tracking ACH transaction status in Zenoti
Zenoti payments allows businesses to track the live status of ACH transactions through the following stages:
Pending: The transaction is initiated but the funds have not yet been collected.
Settled: The funds are acknowledged by the ACH system but not yet deposited.
Success: The transaction is completed, and funds are deposited in the business's account.
Failed/Reversed: The transaction has been rejected due to insufficient funds or incorrect bank details. A reversal is recorded in the digital payments report.
ACH and global direct debit systems
While Zenoti supports ACH in the US, it also supports other direct debit systems globally, such as SEPA in Europe, PAD in Canada, and NPP in Australia. This allows businesses to manage direct debit payments seamlessly across different regions, making it easier to handle recurring payments efficiently on a global scale.
Managing customer authorization
For ACH transactions, businesses must collect a mandate or authorization from customers to debit their bank accounts. Zenoti Payments streamlines the process of collecting and managing customer mandates, ensuring compliance with regulatory requirements. This process helps businesses securely obtain authorization for recurring payments, while maintaining customer trust.
Impacts and considerations
While ACH Direct Debit offers a cost-effective payment option, it is not a guaranteed payment method. There is a risk of failed payments due to insufficient funds or incorrect account details.
Disputes in ACH transactions are non-defendable, meaning businesses cannot contest them. As a result, disputes automatically move to a lost status, which can lead to potential revenue loss. Businesses should be aware of these risks when utilizing ACH for payments.
ACH transactions are only supported for recurring membership payments.
To get the rates for ACH transactions, you must contact Zenoti.
If there are no reversals or rejections, the transaction is automatically marked as Successful.
If a reversal or rejection is received, the transaction status is automatically marked as Reversed, and a negative entry is added to the digital payments report.
The invoice will be closed only after the payment is successful.
The Direct Debit report tracks the ACH transactions for your business.