What is an ACH Payment?

ACH is an acronym for Automated Clearing House. An ACH payment is an electronic debit or credit transfer that allows inn or bed and breakfast guests to make payments from their bank accounts. Inns and B&Bs accept ACH payments from their guests in addition to debit and credit cards.

ACH Payment Processing for Inns and Bed and Breakfasts

ACH payment processing makes use of advanced technologies that enable inns and B&Bs to accept ACH payments via the web. Payment processors are merchant-appointed companies that handle ACH payment processing. The timesaving enables inns and bed and breakfasts to focus on running their business and avoid the hassle of paper checks.

ACH Payment in Check Dominated Industries

InnPayment delivers the convenience of electronic payments via multiple payment solutions and payment methods, including ACH payment processing options. InnPayment stands out from the competition thanks to our innovative API payment solution and our extensive vertical experience and expertise. When you partner with InnPayment, you can rest assured that your echeck processing is in safe hands.

How Does ACH Payment Processing Work?

ACH payment processing takes only a few seconds yet there are various steps that need to happen in order to complete a successful transaction:

Step 1: Guest Initiates Online Payment via ACH Payment Method

The guest chooses to pay for a stay at an inn or bed and breakfast using InnPayment. The user selects ACH payment from a range of online payment methods and provides information such as name, checking or savings account number and bank routing number. Upon submitting payment, a series of backend processes is initiated.

Step 2: Payment Gateway & Merchant Account

The InnPayment payment gateway, the front end and interface for ACH payment processing of eChecks, sends the transaction details (name, checking or savings account number, routing number and the amount) to its merchant acquirer, also known as the payment processor.

Step 3: Payment Processor & ACH Network (A)

The payment processor (merchant acquirer) authenticates the payment details by getting its bank, also known as the Originating Depository Financial Institution (ODFI), to send them through the Automated Clearing House (ACH) network via an ACH file. The details are then sent to the guest’s bank to be verified.

Step 4: Guest’s Originating Bank

The guest’s bank validates or denies the transaction depending on the accuracy of the bank information. The bank then relays the ACH file back to the ACH networks. In the event the payment is approved, the guest’s bank transfers the funds to the ACH network minus the interchange fees.

Step 5: Payment Processor & ACH Network (B)

The ACH network sends the transaction details and the approved/denied status back to the payment processor and relays the funds via the ACH file less the assessments charge. In good faith, the payment processor’s merchant acquiring bank sends money to the payment gateway for processing. The processor attempts to complete the direct payment transaction via ACH credit or ACH debit and waits for reimbursement from the guest’s bank. Depending on bank processing time, it can take up to 5 business days to clear. The Electronic Payments Association, formerly known as the National Automated Clearing House Association (“NACHA”), requires that ACH credits are settled in one or two business days and that ACH debits are settled on the next business day.

Due to fund verification not being immediate, the payment processor carries the risk of insufficient funds occurring. If that happens, the guest’s bank, which usually credits the merchant acquiring bank, calls back the funds and charges a non-sufficient funds (NSF) fee. At this point, the payment processor charges the payment gateway and the payment gateway charges the merchant who usually passes the fee to the guest. The NSF fee originally charged to the payment processor is separate and independent of the NSF fee charged to the guest by the bank.

Step 6: Payment Gateway & Merchant Account (B)

InnPayment’s payment gateway forwards the transaction approved/denied status via the online payment interface to the guest. If the ACH payment is rejected, InnPayment’s payment gateway sends the information back to the site and ACH payment processing grinds to a halt.

Step 7: Payment Via Merchant Receiving Bank

At this point, the money is ready to be transferred from the merchant acquiring bank account, known as the Receiving Depository Financial Institution (RDFI), to the inn or bed and breakfast’s bank account. Because they are a partner and have a sub-merchant account with InnPayment, the payment gateway disburses the net payment into their bank account. When ACH payment processing is completed, the guest receives notification that payment went through and is shown a confirmation screen. A receipt is then emailed to the guest and reports are updated in real time indicating that an ACH payment has been made.

Why Accept ACH Payments with InnPayment

InnPayment views you as a valued partner rather than a customer. We believe that building a relationship with you is good for us both. Working together, we get your valued business, and you get our extensive industry expertise in leveraging online payment methods for collecting charges for inn and bed and breakfast charges.

Inn and bed and breakfasts large and small accept ACH payments using InnPayment. Considering we processed millions of ACH payments in the last year, we are truly on our way to changing the way the world pays.