Agile Payments Blog

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ACH Payment API Requirement Considerations for 2020

Jan 13, 2020 10:13:45 AM

Many software applications have a need to accept payments, and many require the need to integrate payments functionality via an API. For some of these application organizations, integrating to a credit card API isn't enough and have a need to integrate to an ACH Payment API.

This would especially be true if the application supported customers of a subscription ACH Payment Integrationnature with recurring transactions. These type of customers are generally known well by the organization using the software application, mitigating risks that would otherwise be problematic with transactions originated via an ACH payment API. Moreover, these subscription based customers likely rely on an on-going service or product delivery and are far less likely to chargeback transactions. There's also far less risk of product delivery delays as it relates to NSF notification of returns via the ACH network.

With transactions originated through an ACH payment API, the processing costs are much lower than credit card transactions. Typically there is a reduction on processing costs of ~80% versus processing payments through the card networks. The lower processing costs contribute to a healthier bottom-line for the company using the application. Further, having an additional payment rail can provide the organization using the application a backup payment method for failed transactions.

ACH transactions are drawn on checking or savings accounts at customers banks and credit unions. Those checking and savings accounts don't expire like credit cards. In addition to credit cards expirations there are cards that get compromised and other re-issues for things like EMV. This contributes to more failed credit card transactions. In the subscription based world, credit card transactions that are declined average ~15 percent. While there are credit card updater service that can help, there is still customer service time involved with tracking down new card data from declined transactions. On the other hand, ACH transactions average less than 3 percent in the subscription sector. It just makes sense for any application with recurring transactions to employ an ACH payment API.

Below are some ACH payment API functional considerations for your SaaS organization:

  • Support for account authentication.
  • Negative checking balance verification.
  • PCI compliant platform, even though at this time it's not required for ACH transactions.
  • And API that supports both ACH and credit card transactions.
  • Tokenization of sensitive data.
  • Utilization of webhooks and callbacks.
  • No charge for integration support.
  • NSF automated handling.

Agile Payments has been assisting software applications for 19 years in integrating ACH and credit card payment functionality. If your application has a need for payment integration, contact us and we'll listen to your requirements and present the best possible options for you and your clients.

Gene Krause
Written by Gene Krause

Gene has been consulting businesses of all sizes for 25 years and providing them with strategic payments and gateway integrations.

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