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Have you considered offering ACH (Automatic Clearing House) payments for your dividend distributions as an alternative to the traditional paper check? We highly recommend offering automatic payment deposit and look forward to coordinating this service for your shareholders.

ACH payments have become an increasingly popular method for shareholders to receive their dividend payments as opposed to the traditional paper check. Growing steadily in popularity, ACH payments reached 26.8 billion processed transactions in 2020, totaling $61.9 trillion in value. (source: Nacha 2021 –

The benefits of receiving a payment via ACH versus a paper check is as follows:

Lower Costs – The cost of ACH vs. printing and mailing physical checks can be significantly lower. These cost savings are also realized in the transaction costs associated with processing paper checks vs. ACH payments. While the transaction costs associated with paper checks are generally lower in the end, the cost of time and labor expenses make the paper check costlier than an ACH payment. And let’s not forget the environmental benefits of ACH over paper checks.

Convenience ACH payments are convenient for your shareholders. Shareholders aren’t having to wait to receive their check in the mail which is subject to delays from weather and mail carrier shortages at the post offices around the country. Shareholders can set up ACH instructions one time (and online if desired) and receive their payments electronically for all subsequent distributions. They no longer need to deal with trips to the bank to deposit their checks.

Security – According to the AFP Payments Fraud and Control Survey, paper checks are subjected to fraud the most in 2021. 66% of checks vs. 19% of ACH credits. (source: 2021 AFP Online – It isn’t surprising that checks are more susceptible to fraud. There are several ways that a check can be compromised or defrauded. Checks can be lost, either in the mail or by the shareholder. Checks are often handled by several entities along the way, making them vulnerable to signature forgery or tampering. Checks contain the full account number, routing numbers, payee’s name and address fully visible on the check, leaving the information vulnerable to fraud. ACH payments can’t get lost in the mail or by the shareholder, they cut out all intermediaries, thus reducing the risk of fraud and tampering.

Faster Processing Time – ACH payments are processed electronically, unlike a paper check, which has to go through the mail, this cuts down on processing time tremendously. A shareholder could have immediate access to their dividend payment on the payable date as opposed to waiting for the paper check to arrive via mail and then having to deposit the check and wait for the processing time at the bank. In addition, banks will generally process an ACH payment before a paper check.

Shareholder Satisfaction – Keeping your shareholders is priority number one for you and for Continental Stock Transfer & Trust Company. Shareholders often call requesting to enroll in ACH and it is the preferred choice of most shareholders. Offering ACH provides your shareholders with a secure, fast and convenient method of receiving their dividend distribution. The use of checks has steadily declined from over 40 billion transactions in 2000 to less than 20 billion in 2018, while the number of ACH transactions has grown at an annual rate of 6% from 2015 to 2018 and show no sign of stopping with record growth in 2020 and 2 billion payments added. (source: Federal Reserve 2019 –

Avoids Potential Abandoned Property for the shareholder due to uncashed checks. Therefore, this reduces escheatment administration and cost for the company.


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