Breaking Down ACH Fees: What Businesses Need to Know

Introduction

ACH payments offer businesses a secure, low-cost alternative to wire transfers and checks. However, like any financial transaction method, ACH payments come with associated ACH fees. Understanding these fees is crucial for managing payment costs and optimizing cash flow.

This blog breaks down the different types of ACH fees, their average costs, and strategies to reduce expenses with automation through Profituity’s PlatformNext.

What Are ACH Fees?

ACH fees refer to the charges that businesses pay to initiate or receive ACH transactions through the Automated Clearing House network. These fees vary based on factors like payment volume, type of ACH transaction, and the financial institution handling the transfer.

Types of ACH Fees

ACH Origination Fees

The originating bank (ODFI) charges this fee to process ACH credit or debit transactions. Origination fees can range from $0.10 to $1.50 per transaction, depending on the bank and payment volume.

Same-Day ACH Fees

Businesses that require same-day processing pay an additional fee for expedited service. The Federal Reserve imposes a standard fee of $0.052 per same-day ACH transaction. Banks may charge additional service fees.

Return and Reversal Fees

If an ACH transaction fails due to insufficient funds or incorrect account details, businesses may incur return fees ranging from $2 to $10. Similarly, reversal requests may carry separate charges.

Monthly Maintenance Fees

Some banks charge a flat monthly service fee for access to ACH services, which can range from $10 to $50.

How Much Does an ACH Payment Cost?

The average ACH payment costs $0.20 to $1.50 per transaction, depending on factors like:

• Volume Discounts: Higher transaction volumes typically result in lower fees.

• Transaction Type: ACH credits (e.g., payroll) may have different fees than ACH debits (e.g., recurring bill payments).

• Bank Policies: Each bank or payment processor sets its own fee structure.

Comparison:

Why Are ACH Fees Lower Than Other Payment Methods?

The ACH network processes payments in batches, which reduces processing costs compared to real-time systems like wire transfers. Additionally, ACH payments require minimal manual intervention, making them cost-efficient for high-volume transactions.

Example:
A payroll services provider saves over $20,000 annually by switching from wire transfers to ACH payments for employee salaries.

How Profituity’s PlatformNext Helps Reduce ACH Fees

Profituity’s PlatformNext offers businesses tools to optimize ACH payment costs:

• Batch Processing Automation: Reduces manual intervention and improves efficiency.

• Fee Monitoring: Tracks transaction fees to help businesses identify savings opportunities.

• Same-Day ACH Support: Minimizes delays while maintaining low processing costs.

Schedule your demo today to discover how PlatformNext can streamline your payment workflows and reduce ACH fees!