Welcome back to Leading the League, where we connect with industry experts and partners who help businesses operate more efficiently and profitably. This time, AAM and Total Truck Centers President, Tim Odom, sat down with Lewis Ketron and Mark Vertreese from Fifth Third Bank’s Motorsports and Automotive Aftermarket division to discuss a topic that is becoming increasingly important for distributors, jobbers, and suppliers alike: ACH payments.
As credit card processing fees continue to climb, many businesses are taking a closer look at alternative payment methods that can help protect margins while improving efficiency. ACH is one of those options, but many business owners only have a basic understanding of how it works and where it fits into their operations.
Why ACH Is Getting More Attention
ACH, short for Automated Clearing House, is an electronic payment method that moves funds directly from one bank account to another. Unlike credit card transactions, there is no third-party card processor involved, which can significantly reduce transaction costs.
According to Lewis, ACH has become especially attractive as businesses face rising interchange fees and surcharges associated with credit card payments.
The cost of doing business by card is what we call interchange, It’s anywhere from 1.5% to sometimes 4%… Accepting a card for payment really becomes detrimental and it can become cost prohibitive based on the size of that, that expenditure.
ACH fees are typically charged as a flat fee per transaction, often just a few cents.
For businesses handling large wholesale transactions, that difference can have a major impact on profitability. A surcharge that seems manageable on a retail purchase can become a significant expense when applied to a large inventory order.
Lower Costs Are Only Part of the Story
While cost savings are often the first thing businesses notice, ACH offers several additional advantages.
Lewis explained that ACH payments eliminate many of the expenses associated with paper checks while also reducing reliance on card networks. Since payments move directly between financial institutions, businesses gain more control over the transaction process.
The benefits become even more significant for companies with recurring customers, repeat transactions, or regular vendor payments. ACH systems can often be integrated into accounting and enterprise software platforms, helping automate payment workflows and reduce administrative effort.
Mark noted that many businesses are beginning to reevaluate how they manage payables and receivables as card costs continue to rise, making ACH a practical solution for both buyers and suppliers.
Faster Than Many Businesses Realize
One common misconception is that ACH payments take significantly longer to process than other payment methods.
While standard ACH transactions typically settle within one to two business days, same-day ACH options have become much more common in recent years. Lewis explained that transactions submitted before certain cutoff times can often settle by the end of the same business day.
ACH is still a fraction of the cost of a paper check. It’s still significantly less than a wire… ten times less than a wire. So that that type of transaction is replacing a lot of the normal methods of exchange.
As settlement times improve, more businesses are becoming comfortable using ACH for transactions that previously would have required checks or wires.
What Shop Owners Should Ask Their Bank
For companies considering greater ACH adoption, Lewis recommends starting with a conversation about costs, transaction limits, and reporting capabilities.
Understanding the true cost structure is important, as pricing can vary depending on transaction volume and banking relationships. Businesses should also ask whether they can both send and receive ACH payments and what level of remittance information is included with each transaction.
That remittance information can be critical for accounting teams. Knowing where a payment came from and what invoices it applies to can save considerable time during reconciliation.
Lewis emphasized that properly configured ACH systems can carry detailed payment information, making it much easier to match incoming funds with customer accounts and outstanding invoices.
Security Still Matters
Like any payment method, ACH requires proper controls and safeguards.
One advantage is that ACH disputes and return windows are generally shorter than credit card chargebacks, providing businesses with greater certainty once funds are received. However, ACH transactions can still be recalled under certain circumstances.
The larger concern often comes from fraud attempts targeting outgoing payments. Social engineering schemes, phishing emails, and fraudulent account change requests remain common threats.
Lewis stressed the importance of verifying payment instructions, particularly when receiving last-minute requests to send funds to a new account. Strong internal controls and employee education remain some of the most effective defenses against payment fraud.
Tim shared that The AAM Group uses a multi-step approval process for ACH transactions that includes multiple levels of review and direct bank verification before payments are released. While the process adds an extra layer of effort, it significantly reduces risk.
The Future of ACH in the Aftermarket
As electronic payments continue to evolve, both Lewis and Mark believe ACH adoption will continue to grow across the aftermarket.
Rising card fees, improved settlement speeds, and expanding integration with business software platforms are making ACH more accessible than ever. For many jobbers, distributors, and suppliers, it offers a way to reduce transaction costs while maintaining the security and efficiency needed to manage modern business operations.
We appreciate Lewis and Mark from Fifth Third Bank for joining us and sharing their insights on ACH payments, transaction security, and emerging payment trends. Stay tuned for the next episode of Leading the League as we continue bringing valuable conversations and industry expertise to the aftermarket community.
