Online shopping is a quickly growing market because it offers many benefits to consumers. It’s convenient, it avails customers the ability to shop at stores that are impossible to commute to, and it’s open 24 hours a day, all year round. There are even several payment options available. The traditional methods of paying by check or credit card are options afforded by most online vendors, but there is a growing trend towards using automated clearing house (ACH) processing companies to get payments to vendors faster. Buyer beware because faster doesn’t always mean better. As a consumer, it is important to be aware of the risks associated with this type of payment and to know how to protect yourself.

To understand how using ACH can put you at risk, it is important to know how the process works. Suppose you pay for merchandise by check. The merchant deposits that check, but must wait through the holding period of up to four days before funds are credited to their account. This safeguards banks against losing money because of a check written with insufficient funds. If the check doesn’t clear, it goes back to the originating bank and the merchant doesn’t get credited the funds. This leaves the merchant out of money and merchandise. Using an ACH eliminates the holding period and streamlines commerce.

So what does the ACH process mean for consumers? Oftentimes this means giving out your banks’ routing and account number to vendors, whereby giving the merchant your permission to transfer funds directly from your account. This is true whether your gym membership fees are deducted directly from your checking account, your paycheck is directly deposited or you use a PayPal account. Find out which ACH company your merchant uses. A reputable ACH company that has been in business for some time is well versed in protecting your identity and transferring funds responsibly.

Making sure the middle man, or ACH, is reputable helps to protect consumers against fraudulent transfer of funds. For example, if you cancel your gym membership, but the gym continues to debit your account monthly, what recourse do you have? If you use online vendors frequently and are accustomed to paying directly through your checking account, make sure they vendor is reputable. Be cautious of giving out any of your banking information online. It may be well to keep a separate account dedicated to this type of purchase. Doing so can help protect your household funds that could otherwise be put at risk. Spend smart and pay smart.

One Response to “Ach – Making Secure Online Payments With Ach”

1. Laurie Scully says:

   13/06/2011 at 12:00

   Laurie's Security Issues!: Ach – Making Secure Online Payments With Ach http://dlvr.it/W7ZHc LSdcMM