What Is ACH Payment?
ACH stands for Automated Clearing House, a US electronic network for financial transactions – a network that processes large amounts of credit and debit transactions in batches. Among the numerous Automated Clearing House payments covered by this system, you can find business-to-business payments as well.
Well, ACH is the process we here at Spoonity use to offer you quality Reconciliation.
What Is Reconciliation?
Basically, it’s the process of debiting and crediting merchant store according to the redemptions and reloads that took place at each store location.
To understand that, you need to know that there are 2 types of reloads (in-app and in-store reloads), and 2 types of redemptions (in-store redemptions, and redemptions done through the app or online ordering).
If a customer reloads their balance in the store, this is the process:
- They load $10 (as an example) through the cashier to their account.
- The sale is processed by the cashier through the POS (thanks to the integration with Spoonity). The $10 are loaded on the client’s account.
- The store takes the $10 without charging a tax on the sale.
- The store will keep the liability until we run the Reconciliation process.
If they were to reload the balance through the app, then:
- The client would add their credit card on the app.
- They would add the sum they want (let’s say $10 again).
- Spoonity then leverages the payment gateway, charges the client the $10, and loads their account with that amount.
- Afterward, the $10 are deposited to your business’ master bank account.
Now, let’s discuss the redemptions. Here’s the process for in-store redemptions:
- The customer who loaded $10 will come to one of your stores (Store A) to redeem that amount to cover their bill.
- When we run the Reconciliation process, that store will receive that amount, as well as any other redemption amounts.
As for clients who perform in-app or online ordering redemptions:
- The client who loaded the $10 uses that amount when placing an order to a different store (Store B) so that they can cover the bill.
- When we run the Reconciliation process, that store will receive this amount, as well as any other redemption amounts too.
So, we pretty much determine the total amount that was redeemed and collected at every one of your stores – that accounts for your store’s liability.
You should know that a store can have 2 types of liabilities:
- Negative Liability – In this case, the store has collected less money than has been redeemed at it.
- Positive Liability – In this situation, the store has collected more money than has been redeemed at it.
Essentially, Reconciliation is what Spoonity does to make sure that none of your stores are left with a negative liability. We do that by withdrawing money from the stores that have a positive liability and the master account, and then use ACH transactions to deposit the money to the stores that have negative liability.
How Does Spoonity Handle Reconciliation?
If you want a more in-depth overview of the whole process, here’s what you need to know:
First, we calculate the total positive liability amassed by all your stores. Next, we determine which percentage each one of your stores represents of the total liability.
Afterward, we add the sum to the total amount of money that must be paid out to the stores with a negative liability.
This way, each one of your stores is treated fairly, as only a small amount of money is taken from each individual store. After everything is handled, we pay out the stores with negative liability, bringing them down to $0 liability.
And that is where ACH transfers come into play, as they are secure, accurate, and reliable.
We should also add that you can schedule the Automated Clearing House process according to your needs:
Just keep in mind that the monthly process is the most cost-efficient, as banks tend to charge higher fees if the process is run more often.
Lastly, we should also add that we do not handle ACH transactions for stores that have a withdrawal or deposit of less than $5.
Learn more about how Spoonity works with Automated Clearing House Payments?. Get in touch with us Today!