Digital transformation is changing the dynamics of many sectors, and the real estate industry is also not left behind. Today, real estate investors, sponsors, realtors, brokers, and many other real estate professionals have many technology-driven solutions to simplify and accelerate their businesses.
ACH Payments is among the innovative solutions that have changed the way investments and investment management occur. It minimizes the time required for a transaction and helps real estate professionals concentrate on their core business activities.
This article takes you through various critical aspects of ACH Payments. We intend to let you know more about this incredible feature and understand some technical aspects. Let’s begin with the meaning of ACH Payments:
What is ACH Payment?
Automated Clearing House (ACH) is a countrywide network. Using this network, one can make bank transactions.
ACH is a network of computers built to make and receive payments across bank accounts within the country. At the sending and receiving end, the computers communicate to send and receive funds.
Enterprises in the US use ACH Payments to pay bills, loans, mortgages, remunerations, and direct deposits to the desired bank accounts.
How do ACH Payments help Syndicators?
Real estate syndicators can leverage the ACH Payment feature for timely distributions. The feature allows syndicators to plan and execute the distribution of profit shares among investors swiftly.
As you know, real estate syndicators pool financial resources to acquire a property or to complete a real estate project. In return, investors get a predetermined amount based on their contribution to the total capital investment.
Adopting an investor portal integrated with ACH Payments - like SyndicationPro, will be a crucial strategic decision for real estate syndicators. Along with many other features of the investor portal, ACH Payments can help them accelerate their investment management business by automating their profit share distributions among investors.
Syndicators can save valuable time in distributing the profit shares among their investors. Conventionally, investors had to wait until they received physical checks - deposit them in their banks - and until the funds were transferred from the syndicator’s account.
ACH Payments feature practically accelerates this process by enabling electronic fund transfers from within the portal.
How does an ACH Payment Work?
Technically, an ACH Payment is a data file. This data file has precise information about the desired payment from one bank account to another. To process a payment:
- The data file is sent to the bank of the individual or business sending the payment
- Then, it goes to the clearance house,
- Then, finally, it reaches the bank of the recipient,
- The amount mentioned in the data file is transferred to the recipient’s account.
The transaction reflects on the investor portal immediately after initialization. It requires 4 to 5 business days to settle the transaction practically.
As you switch to SyndicationPro - the best real estate syndication software, you don’t need to worry about the technical setup for using this feature. You just need to enable this feature - and the ACH Payments can be processed from within the portal.
Syndicators need to enable this feature on their portal and complete KYC formalities after adding their business accounts to their verified businesses.
SyndicationPro charges valid subscription and per-transaction fees. There is a set per-transaction limit, and if the amount exceeds it - it will be split in multiples of the set transaction limit.
Technology that makes ACH Payments Secure
SyndicationPro is a cloud-based platform. The makers emphasize adopting the latest technology in the cloud to ensure security. As financial transactions across bank accounts are involved, SyndicationPro has implemented AWS Web Application Firewall for added security.
All the data files are end-to-end encrypted. That eventually makes every transaction genuinely ‘private’ between the two parties. Syndicators can carry out their distributions worry-freely, without any chances of security breaches.
ACH Payment Failure
ACH Payments may fail due to various reasons. However, syndicators don’t need to worry about the funds. The funds they try to transfer are returned to their bank account if the ACH payment fails due to any reason. Some common reasons are
- Closed accounts
- Freeze accounts
- Invalid account numbers
- Payment stoppage
- Non-transaction accounts and more.
For different types of transaction returns; some codes are specified by the federal banking law. Syndicators will get a notification likewise.
For reasons such as ‘insufficient funds’ and ‘uncollected funds’ - some prior action is desired before retrying the payment. ACH Payments may also fail following any authorization issues. Syndicators may need to coordinate with their banks to regain the facilitation.
The following infographic helps you understand and remember the benefits of ACH Payments in real estate syndication. Take a look and adopt SyndicationPro today for quick, transparent, and streamlined distributions through ACH Payments:
The article covers various aspects of ACH Payments, and the above infographic briefs the benefits of ACH Payments for real estate syndicators. We hope that the information is helpful to you and will inspire you to switch to SyndicationPro. Similarly, if you have already adopted SyndicationPro, this article will inspire you to enable ACH Payments on the portal.