In today’s rapidly evolving world, many businesses are looking for more efficient and cost-effective ways to process their payments — and we can help! Utilizing Automatic Clearing House (ACH) for your dividend distributions as an alternative to the traditional paper check will optimize the payment process.

ACH payments are an increasingly popular method for shareholders to receive their dividend payments as an alternative to the traditional paper check. ACH has seen steady growth in popularity; during 2025’s second quarter, ACH payment volume rose 5% to 8.7 billion.  The value of those payments was $23.3 trillion, up $1.7 trillion, or 7.9%, from a year earlier.  Same Day ACH continued its growth trajectory, recording 336.4 million payments valued at $980.3 billion.  Those represent increases of 15.1 and 22% respectively over the same time in 2024, according to the National Automated Clearing House Association.

The 2024 AFP (Association for Financial Professionals) Payments Fraud and Control Survey Report showed that after four consecutive years of declines, the number of organizations reporting attempted or actual payments fraud rose considerably in 2023.  The AFP report showed the number rose to 80%, up from 65% in 2022.  Checks continued to be the most problematic payment method, with 65% of organizations reporting check fraud activity.  Additionally, the report noted that, “Check fraud related to mail theft has become a significant issue for organizations and, more importantly, for the banking industry as they are easy targets for check fraud via mail.”  And even as check process volume at the Federal Reserve declined 8%, AFP pointed to a 40% increase in check-related Suspicious Activity Report filed with FinCEN.

“Increasing check fraud should be reason enough for businesses still issuing paper checks to ditch them in favor of secure, reliable ACH payments,” said Michael Herd, Nacha Executive Vice President, ACH Network Administration.”  The “2024 AFP Payments Fraud and Control Survey Report” is available for download from the Association for Financial Professionals (www.financialprofessionals.org).

Of those who were victims of payment fraud in 2024, twenty-two percent of organizations were able to recover 75% or more of the funds lost due to payments fraud.  This is a sharp decrease from 2023 when 41% of organizations recovered the same amount.  However, 58% of organizations were able to recoup up to 75% of their funds in 2024, up from 29% in 2023. Given these sobering statistics, it is no wonder the popularity of ACH versus traditional paper checks has seen so much growth.

The benefits of receiving a payment via ACH versus a paper check are self-evident. The following are some benefits of ACH:

Lower costs
The cost of ACH versus printing and mailing physical checks can be significantly less expensive. These cost savings are also realized in the transaction costs associated with processing paper checks versus ACH payments. ACH payments do not require the materials, resources, or time it takes to print, mail, and track paper checks. And for the environmentally conscious folks, 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 potential mail carrier problems at post offices around the country. Shareholders can set up ACH instructions one time 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
For obvious reasons, ACH credits are more secure than paper checks because they are electronic and do not require physical delivery or handling. 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 easily intercepted in transit, tampered with, or lost, either in the mail or by the shareholder. 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 are encrypted and processed through secure networks. 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, which reduces processing time tremendously. Typically, ACH payments can be completed within 1 to 5 business days, while paper checks can take a week or more to clear, not including the time it takes to actually receive the paper check in the mail.

Shareholder satisfaction
Keeping your shareholders happy is priority number one for you and for Continental Stock Transfer & Trust Company. We often field inquiries from shareholders requesting ACH, and most shareholders prefer this over traditional paper checks. Offering ACH provides your shareholders with a secure, fast, and convenient method of receiving their dividend distribution.

Written by Nick Giancaspro