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ACH Processing API

An ACH Processing API transforms a software application into becoming an eCheck payment processing and management platform. Whether for the purpose of managing and distributing payroll, or collecting funds for customer subscriptions, integrating for ACH payments can be a powerful addition to an SaaS.

Organizations with a proprietary software platform being used for customer management that have a significant number of ongoing ACH transactions are likely candidates for integrating to and ACH processing API. Additional candidates would be software platforms that are built to be used by multiple organizations who have payments needs, especially those who are used by client organizations that have customers of a subscription or recurring transaction nature, are likely to consider integrating for eCheck capabilities at some point in time. There are a number of reasons why this integration can be an attractive addition.

First and foremost lies in the processing costs when compared to credit card transactions. Credit card transactions are, on ACH Processing APIaverage, about 80 greater than ACH transactions. So, if a large organization using a proprietary platform has a significant number of payments received via credit card transactions, it may be likely they would want to examine the implementation of an ACH API in order to trim processing costs. For SaaS organizations whose platform is used by other merchant organizations, the motivation becomes a bit different, although still tied to processing costs. They are more motivated in making sure their platform has the added value of eCheck acceptance for the potential merchant users they seek to acquire. 

Ideally, an ACH processing API would be a single integration that supports both eCheck and credit card transactions, as credit cards, at least on the payment collection side will not be going away anytime soon. A single integration means a single source of customer service and eliminating an additional integration to a completely different API that relies on a completely different support mechanism. Everything lies under one API and the organization that provides it. For example, customer records can be updated for both payment vehicles, allowing for a fall-back payment method to be added to a customer profile in the case that the default payment method fails, e.g., expired credit card.

Software platforms considering an ACH API integration should map-out their requirements and put together a transaction flow document that they can provide to potential ACH API providers. A good ACH API processing provider will want to know all the details about the application, the requirements and the organization's business model. That's the best starting place for discussions with an ACH API provider. 

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Gene Krause

Gene has been consulting businesses of all sizes for 18 years and providing them with strategic payments and gateway integrations.

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