Payment with ACH

[Bob K]

I think I just posted this, but now I don't see it, so I'm posting again.
 

Does anyone have knowledge of payment through Automated Clearing House (ACH)?

I did four days (including travel) for a new client.  I submitted an invoice saying “terms are net 30 days.”  The client then wanted me to sign up for ACH, which would pay me more quickly.
 

I asked my banker about ACH.  She counseled against it, saying it allows both deposits and withdrawals from my account (without my consent).
 

I declined ACH, and my client became angry, saying it would take 90 days to send a check.  So, I’m waiting for the check. 

[Johnny Karlsson]

I have used it many times. It's basically direct deposit. Sounds weird (and wrong) that it would allow for withdrawals without consent.

[Bob K]

AI Overview
 

Yes, the Automated Clearing House (ACH) network processes both deposits and withdrawals. It is a dual-acting electronic funds transfer system managed by Nacha.
 

ACH Credits (Deposits/Pushes): The payer initiates the movement of funds into an account. Common examples include payroll direct deposits and government tax refunds.
 

ACH Debits (Withdrawals/Pulls): The recipient initiates the transaction to pull funds out of a payer's account. Common examples include recurring bill payments, subscription fees, and utility bills.

[lyrnxG]

Done it with no problem too.  Almost an industry standard at this point 

[Philip Perkins]

My regular folks pay me this way with no issues.  Has not worked (for my credit union) on overseas xfers though.

 

 

[Aprikot]

If you are concerned with revealing your account details for an ACH payment, you might consider setting up an account with a service like WISE. This will allow you to still accept ACH payments, but keeps your actual account details private. (you will pay a small fee to transfer your money out and into your regular account)

[Bob K]

I don't know what happened to my previous reply, but again, I had good reason not to trust this client.  I think the top person in the company was also the field producer, and she said and did some things on the shoot that made no sense.  (And I have decades of experience with hundreds of clients.)  Plus, the false assertion that it takes 90 days to receive a check in the mail.  In my experience, paychecks come within two weeks, and invoices are typically paid within 30 days.  I'll update here when I know more.    

[OB1]

May be time for another banker (which I'm not sure what that means: Teller? CSR? CFP?) There is no way for someone who has your ACH information to withdraw funds without your consent/agreement unless they also have the credentials(personal) to your account.

[Bob K]

OB1, I mean a banker, in his office, in the local branch of my bank.  Not a teller. 

And, as I posted above, AI informs that "The Automated Clearing House (ACH) network processes both deposits and withdrawals."

As I further stated, my client insisted that I give both my account information, and my consent. 

[Philip Perkins]

It's not the ACH process that is making you wait 90 days for your money.  I get my money from my regular ACH payers within a few days.  The 90 day thing is just old-fashioned "invoice-aging".  You are right to be suspicious.

[Bob K]

Philip, read my initial post again.  You've got it backwards.

  

[Jim Feeley]

I accept ACH payments from some trusted long-term clients; and basically from big corporations.

 

Quote

I declined ACH, and my client became angry

 

That's weird and not confidence inspiring.

 

Bob, I'm sure you're way ahead of me, and the source for this article is an insurance company (who I guess can sell you ACH insurance as part of their protection racket), but:

 

------------

How to Help Detect and Prevent Automated Clearing House (ACH) Fraud

Automated Clearing House (ACH) fraud is one of the fastest-growing threats to financial institutions today. According to the U.S. Federal Reserve’s 2024 survey of risk officers, nearly 1 in 3 financial institutions reported ACH fraud attempts, and 11% suffered losses. Fraud attempts increased by 9% compared to the prior year, outpacing growth in debit and credit card fraud.

-------------

 

Rest of the article:

https://www.travelers.com/resources/business-industries/financial/understand-ach-fraud-risk-solutions

 

I mean, it's probably nothing, but the anger and the 90-day thing... Huh...

[Philip Perkins]

7 hours ago, Bob K said:

Philip, read my initial post again.  You've got it backwards.

  

90 days is "invoice aging".  There is no reason to wait that long no matter how they pay you.

[The Documentary Sound Guy]

17 hours ago, Aprikot said:

You might consider setting up an account with a service like WISE

WISE also allows you to receive ACH payments internationally (or, from my outside perspective, I can transfer funds to US bank accounts much more easily).

[Bob K]

Again, I thought I replied already to Jim's information, but now I don't see my reply.

"1 in 3 financial institutions reported ACH fraud attempts."  Wow!  I was wary, but had no idea ACH fraud was so rampant.  I did the right thing.  Thanks Jim.

AI says: "Approximately 31% of financial institutions and organizations experience attempted ACH fraud on an annual basis."

I'll post here again when (and if) I receive a paycheck in the mail.

[stef]

Any time you see AI summaries, you should think "This is what a computer thinks a real answer would look like".

It is not a real answer, but often guesses somewhat correctly. But it's just noise, and adds noise to any conversation trying to get facts. Its best use is to help you find sources, not to use it as a source. It's a terrible source, but can often index good sources.

[JimKarnes]

Hi,

 

We use ACH as the only way we accept payments.  There are a few things that we do to protect us, and all ACH agreements need to specify ACH DEBIT or CREDIT to your account.  You can complete this form with a One time payment or repeated.  You must keep this on file per Nacha regulations.  You should/can only complete this agreement for Deposit ONLY so you can use this form for security purposes if you suspect shady characters. I believe the bank can offer you this form or Nacha has one.  We use a Corporate to Corporate ACH agreement on our letterhead provided by our bank. I'll try to paste it below this email.

 

Now there are a few common sense things we do with our accounts (we use a local credit union, but most banks have some form of these protections):

1. We keep a seperate account just for incoming/outgoing ACH that is unique from our normal "working account". That way if there is fraud, it is limited to this account. 

2. Our bank allow for a Positive Pay and Reverse Positive Pay systems.  We get a notification as soon as the bank receives an ACH (Either inbound or outbound) in which we have 3 hours to approve or deny before the transaction is approved.  If from a regular vendor, we can create a rule to allow in the future and/or set limits per transaction that don't require our approval for this vendor in the future.

 

We have used this system for many, many years and I have even paid Jeff Wexler for some used gear in this method.

 

Normal ACH is about a 24hr deposit/pull when initiated from either end.

 

Here is the form we use (sorry, formatting is missing):

 

Corporate to Corporate Authorization for ACH Payments

I (We) Receiver Company
Name___________________________________________________
RECEIVER (Company Authorizing ACH Credit or Debit Entries to its Account)
Authorize ______________________________________________
(Originator of Company Transmitting ACH Entries)
Hereafter called originator, to initiate a:
[ ] CREDIT [ ] DEBIT to the
[ ] CHECKING or [ ] SAVINGS account number and Financial Institution shown below. I (we) acknowledge that the origination of the ACH transactions to the deposit account must comply with the provisions of U.S. law.
Financial Institution: _________________________________________
City: ______________________________ State: _____ Zip: _________
Routing Transit/ABA Number: ___ ___ ___ ___ - ___ ___ ___ ___ - ___
Account Number: ___________________________________________
[ ] SINGLE ENTRY to occur on or after _______________ (date) in the amount of $_________
[ ] RECURRING ENTRIES to begin on _______________ (date) in the amount of $_________ and thereafter
[ ] weekly [ ] monthly [ ] other _____________ (frequency)
This authorization is to remain in full force and effect until either party has received written notification in 10 days from an authorized signatory.
RECEIVER AUTHORIZED SIGNER: _____________________________________
I am an authorized signer, or otherwise have authority to act, on the account identified in this statement.
ADDRESS _________________________________________________
CITY ___________________________ State _______ ZIP ___________
PHONE ______________________ EMAIL ________________________

[Tyler Faison]

Our business checking account accepts ACH and wires directly, of course, but we use Melio as the intermediary platform to easily collect ACH payments. I find it helpful as a universal and friction-reducing payment method for those that don't want to add us in their bank or payroll co's cumbersome ACH payment system. They sort of treat us like any web payment, but they can pay with their bank like they like to, and it provides a one-way permission street. I include a link with every invoice.

 

Worth exploring IMHO