We live in an age where most people give up on a website if it takes more than three seconds to load. In other words, we’re all in a hurry most of the time, so we value speed and convenience. And naturally, that extends to making payments.
But if you’re working in real estate, you’ve probably seen firsthand how long major transactions can take, especially when they rely on paper checks to clear. Fortunately, transaction options these days are faster and take advantage of the latest technology, with mobile check deposits and ACH transfers among the quickest. For check deposits vs. ACH transfers, which one is the best, and why? Here’s what you need to know.
Before we get into the advantages of mobile check deposits vs. ACH transfers, let’s start with an overview of each.
Your real estate business has probably been depositing paper checks for a long time, but you might not be familiar with mobile check deposits. This is a somewhat new option that’s only been out for a few years.
Mobile check technology allows you to use your phone to take a picture of the front and back of your paper check, enter the amount it’s for, and watch as it posts to your account. As busy real estate professionals, you no longer have to go to the bank to deposit a client’s check.
ACH transfers offer the same convenience, but the process works a bit differently. ACH transfers go through the Automated Clearing House (ACH), which pulls the funds electronically from one bank account and places them into another account — at the same bank or at a separate financial institution. This means there’s no paper and no trips to the bank to complete the transaction. And you can do it within minutes on an electronic device, such as a smartphone, tablet, or computer.
Mobile check deposits and ACH transfers are convenient ways to pay and get paid. They also share some similarities. For instance, both rely on technology, as you can use a mobile device to make an ACH payment or deposit a mobile check. No matter which one you choose, you don’t have to head to the bank to get money into your account, so you save time and effort.
These options are also free ways to send and receive money. Unlike wire transfers, mobile check deposits and ACH transfers typically have no fees associated with them, assuming you’re sending or receiving money domestically and not internationally. Considering that wire transfers often cost $30 or more, it’s nice to know that these other options are inexpensive or even free.
Finally, both payment options let you receive funds quickly, usually within days. Either option works well if you need your funds fast. That being said, you can often get access to your money faster with ACH transfers than with mobile deposits. This is because banking institutions don’t accept mobile checks any earlier than paper checks and will take a few days to clear each one, while they usually accept ACH transfers within one day.
As you can see, mobile check deposits and ACH transfers are fairly fast, convenient payment options that rely on new technology. But they have a few differences. These differences can make ACH transfers the preferred choice on average.
First, there’s the fact that even though you deposit your check with your phone, the process isn’t completely paperless. You still have to wait to receive the paper check. This means you might wait days or even weeks for a client to mail it or drop it off. Then there’s the chance it will get lost or damaged along the way, requiring you to ask for a new one.
Imagine the delays this could cause, whether you’re waiting to get paid via check as a real estate professional or your sellers are expecting to be notified that the money has made it to the escrow account. Either way, waiting weeks for a check to arrive, be deposited, and clear can feel like an eternity!
With ACH transfers, it takes minutes to start the transfer and see that the account has received it. There’s no paper check to wait for and sign, and no possibility of the payment getting lost in the mail. This makes ACH transfers faster and easier for all involved.
Another detail to consider with mobile check deposits vs. ACH transfers is the possibility of the check bouncing. While the mobile deposit process is simple, it still uses a personal check, so there’s always a chance the person who wrote it doesn’t have sufficient funds in the account. This can lead to a bounced check — a big deal whether it’s a commission check or a payment in an escrow account.
Finally, even valid checks can take more time to clear than ACH transfers. Banks can take anywhere from a few days to three weeks to verify checks. You might see the payment amount in your account during this time, but it’s not technically there and available to spend until the check has cleared. If you assume it’s yours after a few days and spend it — and it doesn’t end up clearing — your account balance could become negative.
Most ACH transfers take a day or two to settle, meaning the funds will be available to you either the same day or the next business day. This is because the National Automated Clearing House Association (the trade group that manages the ACH network) created a rule that credits the process within one to two days. You’ll have access to your money by the next day at the latest — which is helpful when you finally get your long-awaited commission payment and don’t have to wait a week for it to clear.
Mobile check deposits and ACH transfers have some advantages compared to other payment methods, as they make good use of technology and are faster than more traditional options. But if you’re considering mobile check deposits vs. ACH transfers, the latter is your best bet when speed matters.
Choosing an ACH transfer means you’ll typically wait a day or two for your money, compared to the possibility of waiting a few weeks for a mobile check to clear. And as you might imagine, buyers and sellers will appreciate the shorter wait time of ACH transfers, too. After all, the fewer delays in the closing process, the better!
That’s why at paymints.io, we’re happy to help real estate professionals, buyers, and sellers send and receive payments fast via our secure platform. Contact us today to schedule a demo and learn more about how we can bring speed and efficiency to real estate payments.