SaaS ACH Payment Processing : 2 Massive Reasons ACH is an absolute must have for recurring billing

1-Decline rates as compared to credit cards are much lower.
Credit card decline? 15% for recurring billers. Imagine losing 15% of your expected revenue?

2-Significantly lower processing fees.

On a $100 transaction via credit cards? Likely $2.75 to process. Same transaction via ACH? Flat 30 cents. 90% cheaper. If you do hundreds of transactions per month that is significant.

SaaS platforms that provide a recurring billing solution know that it’s fantastic tool to make your application users business life easier and more profitable. Payment collection is at the top of the list of most important business activities and at the bottom for dreaded tasks.

Payment processing and the collection rate are immensely important for subscription/recurring billing merchants. In today’s environment credit card decline rates are a massive challenge. Fraud, reissued cards, EMV cards as well lost and stolen cards present multiple problems for billers.

Some statistics*:
On average 15% of recurring credit card payments decline with some industries exceeding 30%
30% of all credit cards are reissued each year
1.5 billion EMV chip cards issues in 2015-6
5% success rates in obtaining new info from customer on 1st attempt after decline
*Information based on Visa | MasterCard publications and PLC

Offering an ACH processing option is becoming mandatory for recurring payments. Credit card payment processing offers an authorization component that is not present in the ACH batch environment. That means you don’t know with certainty that a payment debit will be successful. When credit card decline rates were much lower this “certainty” of being paid could make the credit card fees [much higher than ACH] worth paying. This is no longer the case and especially for recurring payments.

There are 2 BIG reasons you must take a closer look at the ACH Payment option:

Reason #1 - Decline rates are significantly less. Depending on the industry, the SAAS ACH Processing decline rates are usually 1-2%, compared to 15%+ (a HUGE difference). In the credit card world you have expiration dates, data breaches, EMV cards etc. A customer’s bank account is only changing if they switch banks [think about the last time you did that]

Reason #2 - Reduced payment fees. On a $100 average sale with credit cards you would expect $2.50+ in processing fees. Compared to a flat 30 cents on an ACH and it does not take many payments to see substantial savings. If you process 1000 payments per month and used the ACH option for half that’s over $12k per year in savings. That savings tends to go right to the bottom line and helps businesses improve profit margin.

And there are additional benefits as well.

You add a payment option. People like options, and some don’t like using a credit card. Not only that but your application could offer back-up payment option. So if card declines you can hit ACH or vice versa.

By adding the ACH Payment Processing option you are again improving collection rates and making your users life easier.

Always be on the lookout for an edge your competition does not offer, and leverage that in your client acquisition strategy.

Discuss your options and how your SAAS may be able to leverage an ACH processing option to grow your business or find out more about how ACH Processing can help you business by following this link:

Author's Bio: 

Wayne Akey - AgilePayments
Payment Integration | Expert Business Guidance