How to Set Up and Use BACS and ACH Direct Bank Transfer in WooCommerce (2023)

BACS and ACH bank transfers are two of the most popular payment methods for online transactions worldwide. They are known for their low fees, fast processing times, and high security. In recent years, BACS and ACH bank transfers have become increasingly popular among WooCommerce merchants, as they offer a number of advantages over other payment methods, such as credit cards and PayPal.

According to a report, The ACH Network saw growth continue in the second quarter of 2023, with 7.8 billion payments transferring $20 trillion. This growth is being driven by the increasing popularity of e-commerce and the growing demand for secure and affordable online payment methods.

If you are interested in learning more about how to set up and use BACS and ACH direct bank transfer in WooCommerce, please continue reading this article. We will provide you with step-by-step instructions and helpful tips.

What are BACS and ACH Bank Transfers?

BACS (Bankers’ Automated Clearing Services) and ACH (Automated Clearing House) are both systems for electronic payments, allowing individuals and businesses to transfer money directly into bank accounts.

BACS is a popular way to send money and receive payments in the UK. It works similarly to ACH transfers in the US. BACS is managed by Pay.UK, which also offers services such as account switching and digital check handling. BACS payments come in two forms: Direct Debit and Direct Credit.

• Direct Debit: With BACS direct debit, individuals and businesses can automate both one-time and recurring payments. While customers are informed about the upcoming debit amount, they don’t need to take any steps for the transaction.
• Direct Credit: For BACS direct credit, entities like businesses, pension providers, or government bodies directly transfer funds into a bank account. It’s often used for salary disbursement, government aid, and other regular fund transfers.

Conversely, ACH is a digital transaction network in the USA. It handles bulk credit and debit transactions. ACH credit transfers encompass direct deposits, salaries, and vendor transactions. Meanwhile, ACH direct debit covers payments like insurance fees, home loans, and various bill payments.

Both systems offer a secure, efficient, and cost-effective means of transferring money electronically. However, they differ in terms of processing times, fees, and geographical usage. BACS is primarily used in the UK, while ACH is used in the US.

How Do BACS and ACH Payments Work in Online Transactions?

The process for BACS and ACH transfers in online transactions is essentially the same:

1. The customer logs into their online banking account and enters the payment information, including the merchant’s name and account number.
2. The customer’s bank sends the payment information to the respective system (BACS or ACH).
3. The respective system processes the transaction. When the bank transfer process begins, the funds are moved from the customer’s bank account to the merchant’s bank account.
4. The merchant receives the payment from the respective system and applies it to the customer’s account.

Why You Might Want to Accept BACS and ACH Payments on Your Online Store?

BACS and ACH offer a number of benefits for both merchants and customers:

• Lower transaction fees: BACS and ACH bank transfers typically have lower transaction fees than other payment methods, such as credit cards and wire transfers. This can save merchants and customers money, especially for large transactions.
• Faster payment processing times: BACS and ACH bank transfers are typically processed faster than other payment methods, such as checks and wire transfers. This means that merchants can receive their payments more quickly, and customers can have access to their funds sooner.
• Increased security: BACS and ACH bank transfers are secure and reliable ways to transfer money. They are processed through a secure network and use encryption to protect customer data.
• Global reach: BACS and ACH bank transfers can be used to send money to bank accounts in a variety of countries. This makes them a convenient and affordable way to make international payments.
• Reduced fraud: BACS and ACH bank transfers are less susceptible to fraud than other payment methods, such as credit cards. This is because they require the recipient’s bank account information, which is more difficult to obtain fraudulently.
• Improved cash flow: BACS and ACH bank transfers can help merchants improve their cash flow by providing them with a faster and more reliable way to receive payments.
• Convenience: BACS and ACH bank transfers can be made quickly and easily online or through a mobile banking app. This makes them a convenient way to pay for goods and services online.

Is WooCommerce Compatible with BACS and ACH Bank Transfers?

WooCommerce, one of the most popular eCommerce platforms, offers a wide range of payment options to cater to the diverse needs of online businesses. Among these options are BACS and ACH bank transfers.

BACS is natively supported by WooCommerce. This means that you can set up BACS as a payment method on your WooCommerce store without needing any additional plugins. When a customer chooses BACS as their payment method, they will be provided with your bank account details so they can make a transfer. Once the transfer is complete, you can manually mark the order as ‘processing’ or ‘completed.’

On the other hand, ACH is not natively supported by WooCommerce. However, multiple plugins are available that can add ACH payment features to your WooCommerce store. These plugins work by integrating with payment gateways that support ACH transfers, such as Stripe and Authorize.net.

How to Set Up BACS Bank Transfers in WooCommerce

Setting up BACS Bank Transfers in WooCommerce is a straightforward process. Here are the steps you need to follow:

1. Go to WooCommerce Settings: From your WordPress dashboard, navigate to WooCommerce > Settings > Payments.
2. Enable Direct Bank Transfer: Use the toggle under Enable to select Direct Bank Transfer. Once you select Set Up, you will be taken to the Direct Bank Transfer settings.
   
3. Configure Your Settings: Here, you can configure your settings:
   • Enable/Disable: Enable this option to use Direct Bank Transfer. Disable it to turn off this payment method.
   • Title: Choose the title shown to customers during checkout.
   • Description: Add information shown to customers if they choose Direct Bank Transfer.
   • Instructions: Explain how customers can make a payment to your bank account(s).
   • Account Details: Enter your account name and number, bank name, routing number, IBAN, and/or SWIFT/BIC numbers. These details will be shown to customers on the Order Received page and in Order emails after checking out.
     
4. Save Changes: Don’t forget to save your changes.

Keep in mind orders made through Direct Bank Transfer remain On Hold until the payment is verified outside of WooCommerce. As the shop owner, ensure payments are confirmed in bank accounts before handling orders in WooCommerce. It’s important to verify that you are paid before shipping an order and marking it as Processing or Complete.

How to Set Up ACH Bank Transfers in WooCommerce

Setting up ACH Bank Transfers in WooCommerce is not as straightforward as setting up BACS, as WooCommerce does not natively support ACH. However, you can add this functionality using plugins. Here are the steps you need to follow:

1. Choose a Plugin: The first step is to choose a plugin that supports ACH payments. Two popular options are WooPayments and Stripe. Both of these plugins integrate with payment gateways that support ACH transfers.
2. Install the Plugin: Once you’ve chosen a plugin, navigate to your WordPress dashboard. Go to Plugins > Add New and search for the plugin you’ve chosen. Click Install Now and then Activate.
3. Configure the Plugin: After activating the plugin, you’ll need to configure it. This usually involves entering your bank account details and setting up the payment gateway. For this, navigate to WooCommerce > Settings > Payments. Here, you’ll see your newly installed payment gateway listed. Click Manage or Set Up.
4. Enter Your Bank Account Details: In the settings for your payment gateway, you’ll need to enter your bank account details. This typically includes your bank account number and routing number. Make sure to enter this information accurately to avoid any issues with payments.
5. Enable ACH Payments: Once everything is set up, you can enable ACH payments in your WooCommerce settings. This will allow your customers to choose ACH bank transfer as a payment method during checkout.
6. Test Your Setup: Finally, it’s important to test your setup to make sure everything is working correctly. Consider making a test purchase or using the sandbox mode if your payment gateway offers one.

Remember, just like with BACS transfers, orders using ACH are typically set On Hold until payment clears outside of WooCommerce.

How to Optimize Your WooCommerce Store for BACS and ACH Transfers

With BACS and ACH being popular payment methods, optimizing your WooCommerce store for these transfers can significantly enhance your customer’s shopping experience and your store’s operational efficiency.

Here are some tips to optimize your WooCommerce store for BACS and ACH transfers:

1. Provide Clear Payment Instructions: Clear communication is key to a smooth transaction process. Ensure that you provide detailed instructions for both BACS and ACH payments during checkout. This includes providing your bank account details for BACS payments and explaining how the ACH payment process works.
2. Manage Orders Effectively: Orders using BACS and ACH are set On Hold until payment clears outside of WooCommerce. As the store owner, ensure payments are verified in bank accounts prior to handling orders in WooCommerce. It’s important to verify that you are paid before shipping an order and marking it as Processing or Complete.
3. Communicate with Your Customers: Keep your customers informed about the status of their orders. Send them an email when you receive their order, when their payment clears, and when their order is shipped. This will help build trust and ensure smooth transactions.
4. Use a Dedicated Plugin for ACH: If you’re accepting ACH payments, consider using a dedicated plugin that provides additional features for ACH transactions. This can help ensure a smooth transaction process for both you and your customers.
5. Regularly Monitor Your Payment Methods: Regularly check your BACS and ACH settings to ensure they’re working correctly. Also, keep an eye on your bank account to monitor incoming payments.

Bottom Line

BACS and ACH transfers are ideal for situations where you want to save money on transaction fees, process large or recurring payments, or deal with B2B customers. Understanding these systems, ensuring compatibility with WooCommerce, and optimizing your store can provide a seamless shopping experience for your customers.