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Is Your Payment Processor Really Working for You?

payment processor

Your payment processor should be releasing immediate payments, answering your after-hour emergency queries, and taking care of ACH audits. Find out more here!

From managing accounting and taxes to internal treasury processes and budgets, payroll departments play a significant role in keeping almost every aspect of your company rolling forward. Considering the department's responsibility of paying wages and salaries correctly and on time, ensuring records are accurate, and adhering to federal compliance laws, it only makes sense that this job is performed by professionals you trust and can count on.

Since banks are involved in such a major part of the financial management process it only makes sense that they would offer such a service…or does it?

Banking ACH services sprouted as a convenience spin-off option for most banking institutions. Since they’re already part of the process, why not add an additional service of mild value to complete the process full-circle? Essentially, this would be like having your car washed and (since they’re already busy with your car), asking the washers to fix the engine as well. You simply won’t do this because those doing the washing are not mechanics.

Banks Own the Process, so Why Not…?

There is no one size fits all solution for any aspect of your business, and that holds true for banking as well. Clients often think that since banks are so close to the 'distribution lines' of the ACH network, their payroll and payment processing systems must be top-notch, but that's rarely the case.

Your bank specializes in loan processing, wealth management, and credit accounts. They aren’t professionals when it comes to managing your company’s payroll. In addition, with so many other functions they are unlikely to give your business the personal attention it needs to ensure no mistakes are made, compliance is accurate, and details are attended to.

Can you reach your bank at 1 a.m. on a Friday when a problematic payroll batch goes? You're answering the calls from your team, but who is answering your questions?

Third-party payment processors like NatPay work with one aspect of your business in payroll and payment execution. This permits having a direct relationship with multiple banking partners and payment processing to be streamlined, rather than hamstrung. As an example, most banks don’t offer one-day ACH processing. Instead, they sit on Tax Impound deposits for five business days.

This makes sense at first glance, as banks are inherently risk-averse and want to avoid being ‘on the hook’ for bad batching. On the other hand, the risks to your business in potential losses can be massive. Third-party processors like NatPay find a solution for this in pre-funding or wire transfers in advance of the batching to ensure your payments are remitted on your schedule and without concern for a potential NSF on a short turnaround.

Compliance Is on You

In 2017, new regulations were released that require annual NACHA audits. As a payroll processor yourself, you would have agreements with your customers. However, if you want to avoid the complexity of the annual audit, you need to submit your ACH/NACHA files to a third-party processor that also has an agreement with each of your clients.

security fraud protection

Since your bank (or any institution that claims to be part of a bank or bank division) has no agreement with your clients, they are not considered third-party processors by law and therefore you will still be required to complete the lengthy annual audit process yourself. With NatPay as your official third-party institution, they take care of the audits, meaning you don’t have to worry about excessive compliance procedures.

No institution you trust with your business finances should pass compliance issues down to you. Instead, they should be shielding you from them. A first-rate ACH third-party processor that adheres to all rules and regulations should provide you with peace of mind instead of adding stress by leaving you in a minefield of compliance navigation.

What About Fraud?

Nationwide, the Statistic Brain Research Institute recently reported that employee theft costs US companies some $50 billion annually and, according to the Association of Certified Fraud Examiners, payroll fraud alone accounts for 8.5% of all occupational fraud globally. Once you consider that upwards of 27% of businesses have experienced some form of payroll fraud, and that the average payroll fraud instance can cost upwards of $70,000, you can see why fraud protections become critically important for your business.

To combat this, you need to partner with a reputable ACH provider who is as committed to your business as you are. NatPay has decades of experience and knowledge under their belt to prioritize protecting your business. NatPay’s suite of fraud protection systems is constantly evolving and expanding to meet new threats, including high-dollar verification, pennies verification on new accounts, TIN matching for new customer accounts, and a physical review of all new payroll transactions.

NatPay – The Best Way to Pay

NatPay became the leader in the space of payroll execution and remittance by being the organization you can trust to be there for you, anytime. NatPay is as passionate about making your business function with maximum efficiency and success as you are.

NatPay's experience in payment execution comes from the willingness to go the extra mile. Having been in the business of payment remittance for decades, NatPay has grown with the industry to maximize our expertise when it comes to fraud controls and prevention, top-tier web portals, and report distribution tailored to your company's needs. The real key is that NatPay does one thing for your business, does it well, and seeks to find ways to constantly improve—not through new add-on services or additional fee structures tacked onto already owning your cashflow, but toward simplifying your life by taking full ownership of the function of your business you likely worry the most about—the relationships between you and the people and organizations you pay.

Get in touch with a NatPay expert today to schedule a free demo customized to your organization. With greater security, increased efficiency, reduced payment delays, improved tracking capabilities, accurate and immediate financial reports, NatPay's payroll solutions benefit your business in all of the areas where it matters most.

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