A check is merely a one-time written authorization for the payer's bank to pay the payee. An EFT Authorization is also a written authorization to pay but it is good for multiple transactions. It authorizes a depositors' bank to move funds from his/her bank account to the bank account of the authorized merchant. This movement of funds is done between banks electronically, and so the term Electronic Funds Transfer (EFT). EFT is also called ACH (for Automated Clearing House). The electronic movement of funds between banks is more convenient, efficient, secure, faster and far less costly to than the handling of paper checks. The banking system moves trillions of dollars electronically every year.
How do EFTs/ACH work?
The Automated Clearing House (ACH) is an electronic payment network used by individuals, businesses, financial institutions and government organizations. The nationwide network exchanges funds and information throughout the 50 states as well as the U.S. territories and Canada with participation by over 98% of the nation's financial institutions, including thousands of savings banks and credit unions.
The ACH network allows funds to be electronically debited or credited to a company's or individual's deposit account. ACH transactions carry basic entry details such as the individual name (except Point-of-Purchase transactions), financial institution routing number, account number, amount and effective date for the transaction.
The money is deducted from your customer's account by his/her bank on the due date and deposited into your account one to four business days later (depending on your ACH processor).
The member information required to initiate ACH is the same information that's printed at the bottom of a check. No one has access to the member's account balance or any other information about that is maintained by the member's bank.
Yes. In fact the information is more secure than if the member writes you a check each month because all of the information within the computer is password protected and encrypted.
Yes. All consumers regardless of whether they write paper checks or use ACH have a 60 day period from the effective date to contest the transaction with their bank. It is important that you keep the member's signed authorization on file to dispute any reversal claims of this nature.
In Gym Assistant it is easy to reverse the last payment for a member. The member will automatically be denied entry until the payment is received. You can then re-submit the payment until it clears.
An ACH Processor handles debits to member bank accounts (checking or savings). A Merchant Processor handles credit card transactions.
No, although you will probably find that an ACH processor is better equipped to handle the logistics of submitting batch files from like Gym Assistant. Your bank may offer a recurring ACH service where you create and maintain a list of transactions that will occur automatically each month. While this may seem like a great idea at first glance, you will be responsible for maintaining the bank's list of transactions to coincide with monthly changes in your membership. No problem if you don't have many members, but a big problem as your business grows.
That is up to you. Some ACH processors charge a fee for each batch of transactions you send, while some offer a flat fee for unlimited submissions per month. We recommend that you process your monthly billing only on only one or two billing days each month in order to reduce your administrative time (and let you get on to running your business).
If you are using a Gym Assistant preferred processor, then the software will submit your transactions directly through the internet. Otherwise you may need to email an encrypted file or upload the data to the processor's web site.
No. But you do need to maintain the member's written authorization in case the member disputes a charge.
For more information about Payment Processing in Gym Assistant:
Please don't hesitate to call or email us if you have any questions about payment processing. We want to help you find the solution that is right for your business.