Best ACH Payment Processing for Small Business

Automated Clearing House (ACH) payments are a key payment method for certain businesses. In 2022, the ACH network processed 30 billion payments worth $76.7 trillion USD.¹ And their popularity is only growing. ACH payments grew by 3% in total volume from Q3 of 2022 to Q3 of 2023.²

Membership, subscription and service based businesses can all benefit from ACH transfers. You can also streamline business operations using ACH direct debit, such as for payroll and bill payment.

Let's look at the best ACH payment processing for small businesses.

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Top ACH Payment Processing Providers for Small Businesses

Several providers offer ACH payment processing services that are well-suited for small businesses in the United States.

Here’s a list of some of the top providers, based on factors such as fees, ease of use, customer service, and features.

📝 Quick Overview:
Square Stripe PayPal Dwolla QuickBooks Payments Plaid

Square

Square is an all-in-one payment solution known for its flat rate pricing and user-friendly interface. With Square, you can accept ACH, as well as credit and debit card payments.

You can accept ACH payments through Square’s invoicing tool, Square Invoices. Square charges a low flat-rate of 1% per ACH transaction (minimum charge of $1). You can receive up to $50,000 USD per ACH transaction. Square uses tokenization and encryption to secure ACH transfers.³

Square is low cost and free of monthly fees. This makes accepting ACH payments with Square perfect for small businesses. Failed ACH payments with Square also don’t incur any extra fees, which could save you a lot in the long-run. Square also comes with a range of extra features, from POS terminals to marketing and business loans.³

Square has an online help center and AI powered chatbot for customer queries. You can also contact customer service via phone from Monday to Friday 6 am to 6 pm (PST).⁴ ⁵

One drawback to Square is that ACH payments have no maximum fee cap. If you’re a high sales volume merchant accepting ACH payments regularly, Square could end up costing you more than other providers.

ACH payments with Square also take 3 to 5 business days for settlement, which may make it unsuitable for merchants who need access to funds immediately.³

Stripe

Stripe is a popular payment processor for online businesses. It supports a wide range of payment options, including ACH transfers, and is known for its robust set of developer tools.

Stripe is one of the few providers to support both ACH debit and credit transactions.

Stripe charges 0.8% per ACH debit transaction, with a maximum cap of $5 USD. For ACH credit, they charge $1 per transaction.⁶ This makes Stripe an affordable option for high sales volume merchants.

Settlement is normally 4 business days, but you can opt for 2 day settlement for a fee of 1.2% per transaction.⁷ ⁸

Stripe also has a strong suite of features, from global payment support to highly customizable checkout flows. Financial reconciliation enables ACH payments to be matched with invoices, making accounting easier.

Stripe integrates with 450+ platforms, making it highly adaptable to your business. Stripe also offers 24/7 customer support.⁶

A possible drawback to Stripe is its fees for failed and disputed ACH payment. Stripe charges $4 USD per failed payment and up to $15 USD per disputed payment. This could cost you over time, as disputed and failed payments are inevitable for high sales volumes.⁶

💡 If you receive international payments, then you can connect Stripe to a Wise Business account and receive link your EUR, GBP, USD, AUD, NZD, SGD, RON, PLN and CAD account details. With these details, you won’t lose out on international transfer fees and receiving payments is easy. You can also exchange currencies within the Wise Business account at the mid-market rate with no hidden costs.

PayPal

Through its Braintree service, PayPal offers ACH Direct Debit for businesses. PayPal is widely used and trusted, and it provides a secure and reliable way to accept payments. It offers a complete payment processing solution, including ACH functionality.

PayPal offers a range of ACH verification methods, including:

• Tokenized checks
• Independent checks
• Network checks
• Micro transfers⁹

The settlement time for ACH payments with PayPal is 5 business days. ACH transactions have extra fees which you can find in your pricing agreement, meaning they’re not public. For disputes and returns, PayPal charges $5.⁹

The long settlement time of PayPal ACH payments is its main drawback.

Dwolla

Dwolla specializes in ACH payments and supports standard as well as same-day ACH payments.¹⁰ Dwolla also offers a flexible API for businesses wanting to integrate ACH payments into their own systems. They provide a range of options from simple transfers to more complex bank account verification and facilitation of payments.

Dwolla is a white-label solution. This means you can fully customize your ACH payments with your own branding.

Dwolla has a community forum and customer support team. The level of support you receive varies depending on your payment plan.

Unfortunately, Dwolla doesn't make their fees public. But it’s reported to charge monthly fees with lower than average transaction fees, as well as offer custom pricing options.¹¹ ¹²

The drawback to Dwolla is that it supports ACH and wire transfers only. This means you’d need a separate payment processor to offer credit and debit card payment.

QuickBooks Payments

If you’re already using QuickBooks for accounting, QuickBooks Payments can be a convenient option. It allows for seamless integration of payment processing into your existing accounting workflow.

You can process ACH payments for your customer’s invoices or sales receipts.¹³ QuickBooks also offers a range of other payment methods, as well as a robust accounting solution.

QuickBooks charges 1% per ACH transaction, with a maximum cap of $10. With QuickBooks, ACH payments processed before 3 pm (PT) will be delivered to your account on the following business day. If processed after this time, ACH payments will take 2 business days.

If you’re a new QuickBooks user, ACH payments will take up to 5 business days to be delivered in your first month of membership.¹⁴ ¹⁵ ¹⁶

The drawback to QuickBooks can be the customer support hours. For Plus, Essentials and Simple Start plans, customer service is available from Monday to Friday 6 am to 6 pm (PT) only. This can be challenging for businesses that operate during unconventional hours.¹⁷

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Track your bills automatically with QuickBooks and Wise

If you have international bills to pay, not only can you pay them at the real mid-market rate with Wise, but now you can also sync Wise with QuickBooks Online.

You can see your unpaid bills in real time and pay them seamlessly from your ‘Bills’ page on Wise. Your bill payments and any other Wise transactions will be synced, matched and categorized in QuickBooks for simple reconciliation.

Once connected, all bills you create in QuickBooks Online will automatically sync in real time to Wise, where you can choose which ones to pay.

All bill payments you make with Wise will be matched to the original bill in QuickBooks. They'll also be categorized into the right accounts. If no bill is found, each payment will simply be added as an Expense.

See for yourself how much time and hassle you can save.

Connect QuickBooks and Wise:
Save time on reconciliation

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Plaid

Plaid provides a secure way to link bank accounts for ACH payments, and it’s trusted by many financial institutions. It’s often used in conjunction with other payment processors.

Plaid provides a bridge between businesses’ apps or online checkouts and their customers’ bank accounts.

Customers can set up an ACH payment by entering their bank username and password, as well as completing verification checks. Plaid will match this with their banking files and automatically pull routing and account number information from their account, speeding up the process.

Plaid can also check that your customer has sufficient funds, reducing overdraft and non-sufficient funds fees.¹⁸

Plaid supports over 12,000 financial institutions, making the authentication process more efficient.¹⁹ This can help increase customer conversion rates. It’s also developer friendly and can be integrated easily with your app or website.

Plaid doesn’t charge a fee per ACH transaction, as it’s not a payment processor. Instead, Plaid offers 3 plans to choose from:

• Free
• Pay as you go
• Custom

The Custom plan offers volume discounts and starts at $500 per month. Plaid doesn’t make its fees public for the Pay as you go plan. And for the Free plan, you have a maximum cap of 100 customer bank credentials.²⁰

The main drawback of Plaid is that it’s not a payment processor. It facilitates bank connections and speeds up authorization. That means you’ll need to use it with a separate payment processor.

💡 Wise customers can connect their accounts to more than 6,000 apps powered by Plaid via Core Exchange, the data network’s open finance solution

📝 Read on for more:
How to Choose the Right ACH Payment Processor for Your Small Business Advantages of ACH Payments for Small Businesses FAQs Conclusion: Should I Use ACH Payment Processing for my Small Business?

How to Choose the Right ACH Payment Processor for Your Small Business

When choosing an ACH payment processing provider, it’s important to consider the specific needs of your business, such as the types of payments you need to process, your budget, and any other tools or services you might need. Make sure to read the terms and conditions carefully and understand any fees associated with ACH processing.

Assess Your Business Needs

You need to assess what the ACH payment processing requirements of your business are.

For example, do you want to offer ACH payments alongside other payment methods? Do you want recurring billing functionality? Do you need support for ACH debit and ACH credit transactions?

Finding the answers to these questions will make selecting a provider much easier. You’ll be able to quickly narrow down your choice to providers who will support your needs fully.

Compare Features and Fees

Once you’ve worked out what your ACH processing needs are, you’ll be ready to compare the features and fees of providers.

It can be helpful if your ACH provider is an all-in-one payment processing solution. This is because you’ll be able to accept a wide range of payments, as well as access other features such as invoicing and checkout customization. Having a single provider could save you in total fees, compared to using a separate ACH provider on top.

That’s where providers such as Square, Stripe and PayPal standout. Dwolla and Plaid will require you to have a separate payment processing solution.

Of course, you’ll also need to consider fees. If you’re a high volume sales merchant, think carefully about what the provider charges for disputes and failed payments. These are an inevitable part of payment processing and could eat into your revenue.

You should also consider what features are included with providers that charge monthly fees. While the upfront cost may seem higher, these providers could save you money in the long-run depending on what features are included.

Read User Reviews and Seek Recommendations

Conducting research and collecting user reviews is key to making a successful decision.

It’s wise to find other users in the same industry as you or who have the same business model. Their reviews and recommendations will prove valuable as they will likely share the same problems as your business may experience.

Advantages of ACH Payments for Small Businesses

Here are some of the top benefits of ACH payments for small businesses.

Reliability

ACH payments are more reliable than other payment methods.

Recurring billing can be challenging to maintain when customers use their credit cards. This is because cards are often canceled or maxed out, meaning subscription payments will fail.

ACH payments are bank to bank transfers. So it’s less likely that there will be payment issues as customers change their banks less frequently. This will streamline your business operations, in addition to guaranteeing you get paid. For example, you can set and forget recurring payments for your business, such as payroll and bill payment. This reduces manual effort and ensures payments are made on time.

Cost-effective

ACH payments are normally cheaper to accept than wire transfers and credit card payments.

The typical fee stands around 1%, but many providers charge less and even have a maximum cap on the fee amount. Typical credit card processing fees can be as much as 3% per transaction plus a fixed fee on top.

This means you’ll save money on recurring billing when your customers pay with ACH, compared to credit card or wire transfers. That equates to more revenue. This could make a big difference in profit if your business model involves recurring subscription or membership payments.

Security

ACH payments are highly secure. They are direct bank to bank transfers, which use a range of security features, including:

• Micro deposits for validation
• Tokenization
• Encryption

ACH payments have fewer cases of fraud and are regulated by the federal government.

FAQs

Here are the answers to some FAQs regarding ACH payment processing for small business:

What are ACH payment processing fees?

ACH payment processing fees cover the cost involved in securing and facilitating the payment. They’re charged either as a flat fee per transaction or a flat percentage fee per transaction. Certain providers also charge monthly fees to accept ACH payments, while others give volume discounts for frequent ACH payment processing.

How long does it take for ACH payments to clear?

ACH payments normally take 3 to 5 business days to clear. Certain providers also offer same-day and next-day ACH payment options. ACH payments are processed three times during business days. If your payment is submitted after the last processing time, your transaction will take at least a day longer to process.

Conclusion: Should I Use ACH Payment Processing for my Small Business?

Finding the best ACH payment processing for small businesses can be challenging. But if you have a clear idea of what you’re looking for, comparing features and fees will become far easier. If you can already accept ACH payments with your existing payment processor, this could save you money.

If your business is service, membership or subscription based, being able to process ACH payments and offer recurring billing can be crucial. You may increase customer conversion rates, experience less failed payments, and save money on lower transaction fees.

If you receive international payments, then it can be worth looking into an alternative solution, such as Wise Business.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can also get 9 major currency account details for a one-off fee to receive overseas payments like a local.

🔍 Read the guide on how to open a Wise Business account

Some key features of Wise Business include:

Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms (such as Amazon or via Stripe). Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. Batch payment options. Fast payment of up to 1,000 people.

Open a Wise Business account online

👉 Looking to learn more about payment processing tools? Find out more below!

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Sources:

1. ACH Network Moves 30 Billion Payments, $77 Trillion in 2022 Led by Growth in Same Day ACH and B2B | Nacha
2. ACH Network Volume and Value Statistics | Nacha
3. ACH Payments and ACH Bank Transfers | Square
4. Square Support Center - US
5. Talk to Support
6. Pricing & Fees | Stripe Official Site
7. Stripe: Local payment methods pricing
8. ACH guide | Stripe Documentation
9. Payment Methods | ACH Direct Debit - Braintree Support Articles
10. Dwolla Platform Features
11. Dwolla Review: Features, Pricing, Pros and Cons - NerdWallet
12. Account to Account Payment Solution Pricing | Dwolla Pricing
13. Process an ACH bank transfer from a customer in QuickBooks Online
14. Standard Payment Fees & Rates | QuickBooks Payments
15. Why are we being charged 1% on ACH payments?
16. Find out when QuickBooks Payments deposits customer payments
17. [QuickBooks Support](https://quickbooks.intuit.com/learn-support/en-us/help-article/account-management/quickbooks-online-support/L6WqNrDq0_US_en_US)
18. Consumer Payments - financial data solutions | Plaid
19. Why is Plaid involved?
20. Pricing - United States & Canada | Plaid

All sources checked December 2023.