Are ACH Payments Safe?

ACH payments have been gaining popularity in the last several years. There was a big spike in its use during 2020 because the nature of ACH is contactless payments, and since we are moving away from the high-alert days of the coronavirus pandemic, we wanted to talk about something important: are ACH payments safe?

ACH Risks

Because we are looking at the question “are ACH payments safe?” it’s only fair to highlight the biggest risks associated with it.

Credit and Debit risks are present no matter what type of payment system you use – unless you do all your business in cash and collect payment before the product or service is given to the customer. ACH credit risks include when one party fails to make a payment. This might occur when a business encounters financial losses, even up to declaring bankruptcy. The bank typically takes the fall for this, depending on the ACH credit contract in place.

ACH debit risks are one of the main ways fraudsters try to work the ACH debit system in their favor. Scammers can find or be unknowingly given the details of an ACH account (account numbers, routing numbers, etc.) and can then create and carry out unauthorized debits from an account that doesn’t belong to them. The good news is that in this situation, much like when a credit or debit card is stolen or lost, most banks will support the account owner and work to recover those funds and close those security gaps.

Other risks that are commonly associated with ACH payment processing include operational risks, such as clerical errors and electronic failures, and fraud risks, which stem from the fact that more and more sensitive data is being stored online.

How Safe Are ACH Payments?

However, ACH payments continue to be more secure than any other payment type, with fewer than 0.03% of transactions returned as unauthorized, according to Nacha.

It is important to note that this level of safety is slightly higher for payers, and this is simply because the vendor is the one supplying their sensitive payment processing information.

Compared to Other Payment Methods, Are ACH Payments Safe?

Just because the statistics are there doesn’t mean the benefits of ACH payment processing are clear. So let’s compare some different payment methods to ACH and see which is safer.

Many people think ACH and wire transfers are very similar. And while they share many attributes (as many payment processes do), there are some important aspects that tip the scales in ACH’s favor. ACH payments are more secure and less expensive to carry out than wire transfers. The one area where wire transfers beat out ACH is the availability – you can send wire transfers to virtually anywhere in the world, whereas ACH is only available in the United States.

Checks are one of the most vulnerable and unsafe methods of payment. Your bank account and routing numbers are on every check you send.

Contrary to the last few payment methods we’ve discussed here, credit card payments often offer higher levels of fraud protection than ACH does. However, ACH wins out in the quantity department – processing dozens or hundreds of bulk payments per month is not best accomplished by loading those transactions onto a credit card. And if you choose to do business that way, you will still have to then pay that credit card bill, which most likely will be done through an EFT like ACH. Better to just cut out the middleman, yeah?

Get the ACH Answers and Services You Need

Electronic payments processing is a vital component when it comes to running a successful business in the 21st century. And that is why ReliaFund wants to help you answer all the questions you have, including “is ACH safe?”

ReliaFund is the all-in-one ACH and credit card processing solution offering powerful features and payment flexibility for your business.

Contact us to learn more.