How Recurring ACH Payments Improve Business Revenue

ACH enhances the recurring benefits that come with automatic payments.

Recurring ACH payments offer a stable, reliable transfer of funds that’s more secure, durable, and affordable than cards. 

Here’s everything you need to know to decide if recurring bank transfers are right for your business. 

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What are recurring ACH payments?  

A recurring ACH payment is an automatic transfer of funds from a customer bank account to a business — delivered at predetermined intervals such as weekly or monthly. 

Traditionally, recurring payments include a number of payment methods, such as credit or debit cards. The key difference with recurring ACH is the direct transfer from the customer’s bank using the Automated Clearing House network. 

The ACH network is a low-cost, reliable system that enables electronic payments and money transfers between banks and credit unions in the United States. The National Automated Clearing House Association (NACHA) governs this network with a number of operating rules.

Update: What’s new with ACH payments? 

While ACH is one of the oldest digital payment solutions, it’s going through a period of modernization — and more businesses are using these revitalized ACH transactions than ever before. 

Total ACH Network payment volume rose 7.4% in the third quarter of 2024 while Same Day ACH volume soared 67.5%.

Modern ACH payments include enhancements that are layered onto the ACH network for a seamless, secure experience. 

This improved ACH transfer process is called account-to-account (A2A) payments. It means instead of requiring bank information (routing numbers and account numbers), a customer’s bank is securely linked by a single login to their online banking.

How do recurring ACH payments work? 

Using a modern ACH processing platform, businesses can easily set up recurring payments. 

Here are the key steps from authentication to settlement: 

Bank authentication (for first-time transactions)

Before a recurring ACH transaction is initiated, the customer’s bank account must be authenticated and “linked” to verify its ability to send funds. 

This onboarding process is easily completed using an aggregator with open banking APIs, like Aerosync, which verifies accounts through a one-time bank login flow. 

Consent and scheduling

Next, the account holder must consent to automatic withdrawals from their bank account. This includes agreement to the total payment amount and scheduled intervals for ACH credits from their account. 

Transaction initiation

On the scheduled payment date, the payee’s bank initiates the fund transfer through the ACH network. The bank sends a request to the payer’s bank for the specified amount of money. 

Before the payment is approved, the processor performs real-time fraud and risk detection checks to ensure sufficient bank account balance. This prevents returned payments due to insufficient funds or bad account information.  

Money movement and settlement

Once approved, funds are deducted from the customer’s bank and moved to the merchant’s account through the ACH network.

Unlike wire transfers, ACH payments are processed in batches, typically within 1 to 3 days depending on the processing window (First Same Day ACH, Second Same Day ACH, Third Same Day ACH, Next Day ACH).

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Benefits of recurring ACH payments

Recurring ACH payments are catching on because they simplify and automate payment processing at a low cost. 

Here are the biggest advantages of accepting recurring ACH payments: 

Lower transaction costs

ACH payment processing does not rely on debit or credit card networks to move funds, meaning there are no interchange fees to accept these recurring transactions from customers. 

While the exact pricing varies by provider, Aeropay consistently sees businesses save up to 72% on transaction fees with ACH (compared to credit card payments). 

Steady, transparent cash flow

An automated payment schedule ensures regular, predictable direct deposits into your business account. This reliability improves financial planning and strengthens cash flow. 

Fewer manual tasks

Recurring payments remove the need for manual administrative data entry and management for each transaction. Instead, that time can be focused on other areas of your business. 

Less customer churn

Traditional cards expire every three years on average. And many consumers lose or replace them even sooner. Instead, you can link financial accounts that are typically active for over 17 years.

You’ll see less returned payments due to expired card details and a more durable connection to your customers for uninterrupted automation. 

Improved security features

Because modern ACH payments establish a direct connection with your customers’ banks, your business will benefit from greater transparency and accessibility.

This transparency at the bank-level unlocks tools like real-time fraud detection, multi-factor authentication, and verifiable account info (like customer account balance). 

Fast or even instant processing

In 2024, the ACH network offers increasingly fast fund settlement options, like same-day or next-day. In fact, NACHA found 80% of ACH Network volume settles in one business day or less.  

You can even access funds in real-time with guaranteed providers like Aeropay. We’ll deliver funds immediately and handle collecting the customer’s payment once it settles in a couple days. 

Guaranteed on-time payments

Payments providers like Aeropay allow businesses to enable guaranteed ACH for recurring payments, eliminating the risk of chargebacks or declines, and guaranteeing funds will be delivered in full every time.

What kind of businesses use recurring ACH payments? 

Recurring payments benefit a host of use cases. Businesses using recurring ACH payments right now include:

Property managers and landlords

Depending on the size of the business, property managers can either; 

• Embed a simple payment gateway onto their site, or
• Send a payment link to tenants.

Recurring ACH rent payments ensure funds are accessible on-time, every month. This is one of the best ways for landlords to collect rent. 

Subscription and membership services

From gyms to software platforms, recurring ACH payments allow businesses to set up automated billing for memberships or subscriptions. 

ACH is more cost-effective than card payments, meaning businesses retain more revenue without worrying about cards expiring or needing constant updates.

Utilities

ACH payments are ideal for utility providers that rely on predictable billing cycles. Recurring billing with ACH ensures customers’ bank accounts are charged on time, keeping revenue steady and minimizing billing discrepancies or lapses in service.

Loan and financing services

Lenders offering personal loans, small business loans, or other financing options can leverage recurring ACH for streamlined, automatic payments. ACH helps reduce delinquency risk, providing lenders with useful financial insights and a steady repayment flow.

Plus, loan disbursements can be paid out instantly using real-time rails. 

Insurance premiums

Insurance companies can use recurring ACH payments for premium collections. This setup reduces manual billing, helps avoid missed payments, and ensures customer coverage continues uninterrupted, maintaining positive policyholder relationships.

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What does the future of recurring ACH payments look like? 

As financial technology evolves alongside new Open Banking regulations in the United States, we’re seeing a new generation of smarter, more modern ACH-based payments. 

Right now, platforms like Aeropay create a comprehensive process for fast or instant money movement from account-to-account. 

Using a bank aggregator, Aeropay enables user connections to over 12k banks and financial institutions. Those bank connections are the foundation for financial insights and smart transactions. 

Recurring ACH payments benefit from this modern technology because they’re enhanced by greater security, data transparency, and additional features like guaranteed ACH — which eliminate the risk of bounced or returned payment. 

As more consumers, merchants, and banks get on board with account-to-account payments, the United States will see more transactions processed via ACH, RTP, and FedNow instead of card networks, cash, wire transfers, or paper checks.

To see how Aeropay makes accepting recurring ACH payments an advantage for your business, schedule a call here.