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Considering an ACH Payments API

Software organizations that serve a customer base having recurring payments can better position themselves by integrating to an ACH Payments API. There are many reasons this is true, but the underlying fact that allows this is that these type organizations have a customer base of a subscription nature and who know their customers well.

These customers of a recurring transaction nature have subscribed to a continuing service that the organization who is using the ACH Payments APIsoftware application provides. Therefore, the risk profile of these customers is very different than a website who sells products that are of a one-time purchase senario. In many cases these transactions of a recurring nature are providing a service that the customer is relying on and who has subscribed to. They count on the continuing delivery of the service, or in some cases future product delivery. This provides an opportunity for the software organization to utilize ACH payments via an ACH Payments API to integrate their software offering, resulting in lower payment processing fees.

Every merchant organization strives to acquire and maintain the lowest credit card merchant account fees they can get. With customers of a subscription based nature, it would be foolish to not consider integrating to an ACH payments API. Processing costs for ACH transactions can be as much as 80-90 less than credit card processing costs. When margins are slim, the savings in processing costs can be significant to the organization using the software platform in facilitating their customer base' services. For example, if we use a company who has a customer base that processes 2,500 transactions per month with an average sale amount of $100, the difference is monthly processing costs would be ~$6,200, or $74,000 annually. Now, of course the percentage of participation by customers will not always be 100%, but it's easy to see why an organization can benefit greatly by integrating to an ACH payments API. 

So what if the software application is used by multiple merchant organizations, something commonplace is today's technological world? Usually these organizations are the first to come to grips with the need to integrate for ACH payments. They recognize early on that they must position their application as best they can to provide maximum value to the merchant organizations who use their software platform. Integrating for acceptance of ACH processing can be a make or break proposition for merchant organizations who are searching for a software platform to facilitate their needs in operating their business.

If your organization is considering integrating to an ACH payments API, it's best to have a list of requirements to begin discussions with prospective vendors. Make sure you're speaking with people who will make the effort to completely understand your business model, ideally arriving at a solution that meets your every requirement.

 

 

 

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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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