what are bank payments

What are bank payments?

It’s an online world, and the convenience of doing business electronically means many businesses are changing the way they accept payments. It’s not just good for business: Customers want to pay for products and services online. So, as customers make the jump to cashless payments, Wave is introducing a new way to get your invoices paid online: Bank payments.

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What are bank payments?
Bank payments are the digital equivalent of paper checks. Customers can use bank payments to pay for products and services online. Instead of writing a paper check, and without needing a credit card, your customers can provide their banking information online and authorize you to securely withdraw payment straight from their bank account.

How do bank payments work?
Bank payments work just like paper checks, but in a faster, more secure way. Customers pay online right from your invoice, but instead of a physical check making its way from your customer’s hands to yours through snail mail, everything happens electronically via the Automated Clearing House (ACH)—the industry standard network for handling financial transactions—which verifies your customer’s identity and banking information and clears the money to be deposited into your account.

When customers pay by paper check, it can sometimes be weeks before your hard-earned cash makes its way into your bank account. You lose a lot of time to snail mail and processing while your check hangs in limbo.

None of that happens with bank payments. Your customers pay you right from your invoices, and Wave automates the rest of the payment process so you receive your money in just a few days.

Why is payout time longer than credit cards?
Unlike credit card payments, bank payments have to go through the Automated Clearing House (ACH) system, which means bank payments take a few days longer than credit card payments to arrive in your bank account.

The ACH verifies the bank accounts involved in the transaction and also reviews things like whether the customer has enough money in their bank account to make the payment, whether the money is correctly withdrawn from the customer’s bank account and whether the money is safely deposited into the correct account (your account).

The longer payout time doesn’t benefit Wave in any way. We don’t hold your money, earn interest or make any money when the ACH holds funds for any period of time—the longer payout time is only because the ACH system needs time to review the banking information.

Are bank payments safe?
Yes. Bank payments offer an extra layer of digital security to protect both you and your customers from fraud. Wave is certified at the highest level of bank-grade security for handling financial information.

Paper checks pass through the hands of many people before they get deposited. That unfortunately means there are multiple opportunities for the checks to fall into the wrong hands. With bank payments, the process of verifying identities and bank accounts happens entirely online—no other individuals handle the money. Combined with digital security encryption, this means that bank payments are safer and more secure than paper checks.

Why should I use bank payments?
If your customers currently pay you by cash or paper checks, bank payments are a great option for going cashless with online payments. If you think about it, accepting paper checks can be a real blow to your business. You have to:

  • Send an invoice
  • Wait for your customer to find an envelope and stamp
  • Wait for your customer to get around to writing and mailing the check
  • Wait for snail mail to deliver the check
  • Make a trip to the bank
  • Wait for the check to clear….And finally manually update your accounting records to show that your invoice has been paid.That’s a whole lot of wasted time and energy, and it can really mess up your cash flow.Bank payments remove the hassle from getting paid so you can get paid faster and with more security.Bank payments are also a great way for your customers to pay when credit cards aren’t the right fit. You still get the convenience of online payments, but for a low 1% transaction fee.If all of that isn’t enough, don’t forget the magic part: When you get paid via bank payment, your bookkeeping happens automatically. All your payment information flows seamlessly into your Wave account, and that means:✔ Your invoice status is automatically updated to Paid (or even “Partially paid” if that’s the case).

    ✔ The income is automatically tracked in your accounting records and reports.

    ✔ Your customer can automatically view and print a receipt when they pay.

    How do I get access to bank payments?
    We are gradually rolling out access to bank payments for our Wave customers, so some customers will have access to bank payments sooner than others.

    Once bank payments become available in your Wave account, you won’t have to do a thing. Bank payments will be automatically available as an option when you send invoices.

    Bank payments are only available for Wave customers in North America who are using Payments by Wave.

    If you’re new to Wave, you can start accepting online payments on your invoices through Wave today. Set up a 100% free Wave account and turn on Payments by Wave to accept credit card and bank payments on your invoices.

Stephanie Leith
By Stephanie Leith
Categories:   Wave news

The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.