ach for online lenders
As the U.S. economy is expected to slow down, online lenders are seeking ways to cut costs, including their transaction-related fees. ACH is the most cost-effective payment method for both loan originations and repayments. This post will explore how utilizing ACH can help you maximize the savings inherent to this payment method.

How ACH can benefit online lenders

ACH allows online lenders to receive payments faster and more efficiently. Since its inception in 1974, ACH has provided a way for financial institutions to send and receive electronic payments across the U.S.-based ACH Network. Before electronic payment systems gained popularity, lenders used paper checks and money orders to send and receive funds. Now, you can initiate a wide variety of transaction types using the electronic ACH Network, including consumer banking payments and loan repayments.

Emerging recession concerns among online lenders include more credit losses, increased demand for liquidity, and higher funding costs. Its impact could present critical risks to many online lenders that have higher expenditures, less frequent deposits than traditional banks, and less conventional underwriting processes. ACH provides features including direct debits, improved settlement times, and innovative data sources that assist with your underwriting process. Whether you’re preparing for an economic slowdown or seeking additional ways to manage risks, ACH can help benefit your lending business.

If you’re new to ACH, the following post goes more in-depth about how it works: ACH 101: Understanding the Automated Clearing House.

How online lenders can use ACH for payment processing

For starters, ACH is an ideal solution for accepting periodic repayments via direct debit. Using bank transfers, you can keep your processing costs low. As a result, you can accept recurring direct debits (daily or monthly) from borrowers, and thereby improve your cash flow. With more periodic payments, you can then identify potential return or repayment issues early on, freeing up customer service staff time that would otherwise be required to follow up on return issues. This allows you to identify and mitigate future risks with accepting payments later down the road. For instance, recurring payment schedules can be adjusted to payroll deposit schedules, keeping insufficient funds risks low.

Second, ACH can help increase your cash flow. The opportunity cost of slower cash flow is a crucial factor that online lenders should consider as a risk management measure. As an example, if you hold funds in an account and the funds are not being used, your cash is deadweight. Standard ACH settlement periods enforce a hold on lending accounts, which means that it can take up to 5 business days for a transaction to post and lenders to get paid. At Actum, however, we can expedite settlement periods for qualified online lenders so that your funds are available as soon as the next business day.

Finally, ACH can help support your digital transformation journey. Now more than ever, it’s essential for lenders to keep up with the latest technology, including smarter account verification methods. As many online lenders are using non-traditional data, such as education level, during their underwriting processes, incorporating an ACH processor that uses the latest data analysis technology can add additional value. Actum’s Authentecheck™ auto-verification service provides added Know Your Customer (KYC) data, such as account ownership, customer identity, spending behavior, historic income activity, and more, that can be leveraged during the underwriting process so lenders can make more informed decisions when evaluating borrowers.

Actum has proven technology that works with your current loan processing software provider or provider of choice. We’re pre-integrated with leading  lending platforms and loan origination software (LOS) providers, including Centrex Software, MCA Suite, DebtPayProDefi Solutions, and more. Don’t see your preferred software listed? Contact Us today.


In an emerging era of digital transformation and economic uncertainty, ACH provides many benefits that can assist online lenders with balancing cost and cash flow. Actum’s ACH solutions allow lenders to reduce costs with more frequent direct debits, increase cash flow to enable faster funding, and leverage the latest available technology to assist with your underwriting decisions.

Want to talk? So do we. To learn more about how Actum can help your online lending business, please Contact Us to request a free consultation!

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