The Payment Advisor is a monthly Q&A column to which readers can submit questions about card transaction systems, electronic funds transfer, check acceptance and processing, wireless transactions, international funds transfer, and other payment issues. To participate, e-mail questions to [email protected]. Also watch for quarterly articles on related topics.

Q. What does ACH mean?

A. ACH (Automated Clearing House) is the paperless funds-transfer system maintained by the Federal Reserve and other approved operators. It uses electronic networks to exchange funds. An ACH transaction is an electronic funds transfer through the Federal Reserve Bank from a checking or savings account. It can be used for recurring, automatic payments and direct deposits.

Q. Why should you accept ACH payments?

A. Self-storage is based on recurrent rental payments. ACH allows you to accept payments at a markedly lower cost than a credit-card transaction and significantly reduces the likelihood that a payment will be reversed. For example, if rent for a unit is $100 per month, the average cost to accept this payment by credit card would be in the range of $2.50. The cost to accept this payment via ACH should be less than 30 centsalmost a 90 percent reduction in fees. This is why so many of the self-storage software vendors are emphasizing ACH for recurrent payments as a feature of their programs.

Q. Can I accept credit-card and ACH payments? Even from the same renter?

A. Yes, you can. Forms of payment can be mixed, depending on the needs of the merchant and customer. For example, you might want to accept a credit card for an initial payment or when the customer is buying a specific item such as a lock. However, after youve established a relationship with the renter, its highly advantageous to accept his monthly payments by ACH.

Ross Federgreen is a co-founder of CSRSI, which provides an integrated approach to the analysis, design, implementation, deployment and management of electronic transaction services and systems. Since 1999, the company has helped more than 350 public and private institutions reduce the cost of acquiring money and minimize the liability exposure related to payment transactions and customer data. For more information, call 866.462.7774, ext. 1; e-mail [email protected]; visit www.csrsi.com.