Unsurprisingly, offering your customers more ways to pay you back results in faster payments. Fortunately, there are more payment options than ever before to offer your customers, including bank payments. Here are just a few of the perks you get by letting your customers pay you with bank payments.
Bank payments enable even easier transfers between accounts, making payments easy to send (for customers) and easy to accept (for business owners). The whole new galaxy of digital payment solutions provides more options and more flexibility than your good ol’ fashioned cash and checks. With all of these new options, it can get a little overwhelming for a small business owner to gauge which solutions are right for them. After all, some require expensive hardware, others come with hefty transaction fees, and still others require ongoing subscription charges that can add up over time.
Despite the potential costs, these systems ultimately enable entrepreneurs to receive payments faster and more conveniently, keep better track of their transactions, and even allow them to stay open for business when they’re fast asleep. The convenience and quickness of payments coming in often surpass the small upfront cost of accepting payments online.
What are bank payments?
Bank payments are the digital equivalent of paper checks. Customers can use bank payments to pay for products and services online. Instead of writing a paper check, and without needing a credit card, your customers can provide their banking information online and authorize you to securely withdraw payment straight from their bank account. Fortunately, this method is just as secure as paying with a credit or debit card online; more on that later.
How do bank payments work?
Bank payments work just like paper checks, but in a faster, more secure way. Customers pay online right from your invoice, but instead of a physical check making its way from your customer’s hands to yours through snail mail, everything happens electronically via the Automated Clearing House (ACH)—the industry standard network for handling financial transactions—which verifies your customer’s identity and banking information and clears the money to be deposited into your account.
When customers pay by paper check, it can sometimes be weeks before your hard-earned cash makes its way into your bank account. You lose a lot of time to snail mail and processing while your check hangs in limbo.
None of that happens with bank payments. Your customers pay you right from your invoices, and Wave automates the rest of the payment process so you receive your money in just a few days. The best part—no money goes missing, and there are no accidental charges.
Why is payout time longer than credit cards?
Unlike credit card payments, bank payments have to go through the Automated Clearing House (ACH) system, which means bank payments take a few days longer than credit card payments to arrive in your bank account.
The ACH verifies the bank accounts involved in the transaction and also reviews things like whether the customer has enough money in their bank account to make the payment, whether the money is correctly withdrawn from the customer’s bank account and whether the money is safely deposited into the correct account (your account).
The longer payout time doesn’t benefit Wave in any way. We don’t hold your money, earn interest or make any money when the ACH holds funds for any period of time—the longer payout time is only because the ACH system needs time to review the banking information.
Are bank payments safe?
Yes. Bank payments offer an extra layer of digital security to protect both you and your customers from fraud. Wave is certified at the highest level of bank-grade security for handling financial information.
Paper checks pass through the hands of many people before they get deposited. That unfortunately means there are multiple opportunities for the checks to fall into the wrong hands. With bank payments, the process of verifying identities and bank accounts happens entirely online—no other individuals handle the money. Combined with digital security encryption, this means that bank payments are safer and more secure than paper checks.
Think about this way: most people feel comfortable paying with their credit or debit card online. Bank payments provide the exact same flexibility, so long as you store your customer’s bank information safely and securely, exactly like a credit card.
The benefits of bank payments?
By accepting online payments, you’re reducing potential friction that could serve to discourage customers from making a purchase, or from sending payment on time. By providing more diverse payment options, customers have the ability to choose the option that is most convenient for them and pay from wherever, whenever and however they want.
Accepting online payments also comes with a range of benefits for your back office, as cash can be expensive and time-consuming to manage, track or utilize. Comparatively, online payment tools will not only keep your money more organized, but will also provide data and insights related to your transactions. For example, there are platforms that can automatically keep your transaction records up to date, help you track cash flow, automate a range of accounting practices, and provide new insights that can help you better manage your business.
Online payments also enable faster checkouts, and in some cases provide the option of one-click payments, making digital transactions faster and more convenient while also being available 24/7/365.
As a result of providing these added conveniences, many business owners often see an increase in sales. According to a study by the US Bank, 76% of consumers carry less than $50 cash at any given time, and use cash to make payments less than eight days in a month. Especially for businesses that operate directly to consumers, you’re opening yourself up for business to the majority of customers who rarely have cash on hand.
Payments by Wave
Payments by Wave lets you accept payments in the US and Canada. If you’re new to Wave, you can start accepting online payments on your invoices through Wave today. Set up a 100% free Wave account and turn on Payments by Wave to accept credit card and bank payments on your invoices.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.