While the ACH network is still a batch network, utilizing an ACH Payment Gateway API can do wonders for software applications in enhancing their capabilities by communicating with a real-time communication integration. Let's examine some of the modern communication tools available from these ACH gateways.
Marriage with credit card processing: Any merchant organization who receives payments for services or products provided are more than likely to have a need to accept credit card transactions. Credit card transactions are transmitted in real-time, and for card not present transactions that means the use of a gateway. If a merchant organization has the need to accept ACH transactions, it would be silly to have to submit a NACHA file if the gateway provider's API also supports eChecks. A single integration can accomplish enabling both payment modals - if the API supports both.
Sensitive data protection: Assuming the API supports data tokenization, a clear advantage to utilizing an ACH payment gateway API is that sensitive bank checking and savings account data is never stored within the SaaS application or it's servers. Instead, the application can communicate with the gateway in real-time to post bank data and be returned a reference token to be stored for future use. This eliminates the potential for theft of sensitive data. While NACHA doesn't currently mandate PCI requirements for ACH transactions, most any ACH gateway that also supports credit card transactions will be PCI level one certified. Why risk theft of merchant customer's bank account data when you don't have to?
Risk mitigation: For many merchant organizations, just transmitting the ACH transactions isn't enough. By utilizing a real-time gateway API there can be additional calls made that can reduce risks to their organization. Below are some real-time risk mitigation tools that can be helpful:
- Transit routing number validation
- Bad account database check
- OFAC check
- Bank account number validation
- Account balance check
- Match identity to bank account
- Confirm account ownership
Reconciliation and reporting: Data can be delivered as soon as the gateway receives it from the RDFI banks instead of waiting for a cron delivered file. Because the SaaS application is integrated to the API, this data can be automatically posted and reconciled. In addition, notifications can be triggered depending on the type of notification delivered. For example, a settled ACH transaction post can trigger a message to customers or internal personnel of the event. Non sufficient funds messages delivered to the application can trigger a series of NSF re-presentment tries and, subsequent to a successful recovery, can trigger an NSF fee debit transaction to be originated.
Any organization that utilizes a software application and has a need for transmitting ACH transactions should further investigate the advantages of integrating to an ACH payment gateway API.