Paying with ACH
ACH is the preferred method for paying invoices among accounts payable experts. When you pay your vendors with ACH you have to work with them to implement the Electronic Funds Transfer, but once it is set up it is easy.
Overall Benefits
There is a growing demand for ACH payments because they offer the following benefits:
- Process claims faster
- More security
- Better traceability
- Faster receivables turnover
- Pay vendors faster
- Better cash flow management
The ACH Boom in 2023
Last year we published a post about the impact of the 2020 pandemic on accounts payable, in particular, the rise in digital B2B payment methods. As with many of the new trends we saw during the pandemic, this one didn’t go away.
According to Nacha, the organization that oversees the ACH network, in the first half of 2023 ACH transactions have grown in both volume (13.7% increase) and value (51.7% increase).
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Wire Transfer vs ACH Transfer?
Wire transfers are immediate and can be used for overseas payments. ACH is more secure and more cost-effective, but does not work for international payments. Wire transfers are best used for one-off large payments. ACH is best used for ongoing, recurring payments like payroll and B2B vendor payments.
The 3 keys to comparing ACH Transfers vs Wire Transfers are:
- Which is faster? Wire
- Which is more secure? ACH
- Which is more cost effective? ACH
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Recent Payments Fraud Trend Highlights
Checks Remain the Most Risky
About 63% of organizations reported incidents of check fraud activity. Despite this risk, about 75% of businesses that use checks on a regular basis say they plan to continue using them.
Digital Payments Fraud is Up
While overall fraud is trending down, there was an increase in digital payments fraud, with credit card fraud rising 10%.
Business Email Compromise Still Common
Business Email Compromise (BEC) is still the preferred method of payments fraud by scammers. 71% of companies were victims of payments fraud via email in 2022. Larger organizations are more susceptible than smaller ones.
Retrieving Funds Lost to Fraud
Fewer than 30% of businesses were able to recover at least 75% of dollars lost to payments fraud. Larger organizations are better equipped to recover funds.
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Is ACH Safe?
ACH payments are a safe way to pay vendor invoices and employee payroll. According to data from NACHA fewer than 0.03% of ACH transactions are returned as unauthorized. ACH remains the for accounts payable departments to pay their vendors.
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