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If you’re a freelancer, you’ve probably used PayPal to accept payments from your clients, and chances are it’s been pretty easy to use. However, as your business grows, and you soon to have more and more people working for you, you may find that PayPal doesn’t quite do the job as well as a traditional ACH deposit.


ACH stands for Automated Clearing House, and it’s an electronic network for financial transactions in the United States. It’s used by both the government as well as most commercial businesses. The way it works is that it groups large amounts of credit and debit transactions and completes them all at once in batches. This includes direct deposit, payroll and vendor payments.


Payments in ACH deposits are sent out in a group, so they’re better for companies to use when distributing out funds. When the company sets up their plan with the bank, employees can have the funds directly into their account within 48-72 hours. This is a lot faster than with PayPal, which can take up to five business days to end up in someone’s account. Yes, it does matter what bank you use, and what bank your employees use, and yes some banks are faster than others by a day or two, but it is still faster and far safer than using PayPal or some other similar digital payment tool.


Most transactions you use PayPal for require some sort of fee, and in most situations the fees are not worthwhile for the service when you have an alternative. A few dollars per transaction may not seem like a lot, but after a few months, you could be saving hundreds of dollars. On top of that, companies need to make sure their PayPal account actually has the funds to distribute. PayPal does work with companies on a large scale, but in order to do that everyone in the company needs to sign up with PayPal and pay the fee as well. This can decrease the amount of revenue that the company has to work with, especially when the number of transactions increases.


Being that Paypal isn’t actually a registered bank, you aren’t entitled to the same safety features you would get when using one. PayPal is notorious for lacking proper security, with stolen/hacked accounts often times being auctioned off online. PayPal can also freeze your account without explanation; They have hundreds of millions of frozen “PayPal” money.

There is one benefit of PayPal, and that’s international payments. With PayPal, you can transfer money in different currencies to other countries overseas. However, without a doubt, when working nationally, PayPal just doesn’t cut it compared to ACH deposits.

In the end, as a worker or an employer, PayPal may be a quick and easy solution on the short term, but you have to wait a few days for the “check” to clear, and then a few more before your bank can actually put the money into your account (or your employee’s). Talk to your coworkers, employers, and employees about ACH deposits, as it will put money back in everyone’s pockets.

There are an enourmous amount of different responsibilities one needs to be aware of when running a business.  Let United Capital Source help. If you find yourself struggling, don’t hesitate to check out our small business loans section.

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