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Where are the ACH API Providers?

ACH API Providers are organizations that provide an API for the purpose of integrating a software application to originate and manage ACH transactions. 

While there are still some organizations who utilize older technologies for originating ACH transactions like ftp file upload and NACHA file submission, many times it becomes advantageous for the organization's software to become the origination and management tool for the ACH transactions. Doing so creates a centralized repository for everything that involves the ACH transactions. The application itself is transformed and starts serving an additional purpose, providing value to the organizations that use the application. 

If one considers what a virtual terminal provides for management of ACH transactions, it ACH API Providersshould be noted that the processor providing the virtual terminal has likely built their VT using the API that they also provide for software integration. While virtual terminals still have their place serving the needs of various organizations, e.g., small organizations without a software platform for management, an ACH API integration creates essentially what is a virtual terminal within a given software application. This becomes a sellable feature for the application, as the using companies don't have to rely on an external virtual terminal or antiquated origination methods like NACHA file submission.

So where does one find the ACH API Providers? Well, if you're reading this post you've found at least one! More importantly, what should one look for in an ACH API provider? Let's examine some potential questions to ask those who you might contact or speak with:

  • Does the API provide for a white label application and boarding experience? Many times the organization finds it beneficial if their customers have a way for applying for an ACH merchant account within their application or website. While it's likely that the actual agreement and terms of service that their customers actually agree to are that of the ACH merchant service provider, having the process take place from within their application creates a white label experience.
  • Does the ACH API provider make available revenue sharing? An organization's application, if being used by multiple businesses creates a vertical reach as it relates to the ACH API provider. In essence, the application and the developing organization becomes a marketing tool for the ACH service. That reach has leverage and should be rewarded for essentially serving as a marketing and sales tool for the ACH merchant service. Make sure to ask about revenue sharing potential for your organization.
  • Does the ACH API provider have advanced reporting tools? While the ACH network is still a batch network, advanced communication capabilities can enhance your integration. For example, a good ACH provider will maintain their own databases of known bad accounts. A webhook response can instantly notify the client that the account is bad. Or, if using an ancillary service for account balance, the user can be notified in real-time that an account is in a negative balance. Even responses like "accepted" for processing or instant notifications of returned items have value for the using client.
  • Does the ACH service provider price their transaction at a flat rate, or do they work on a discount fee (percentage) structure? For very small dollar amount transactions, a discount fee can work. For transactions greater than $35, a discount fee structure becomes more costly than a flat rate structure, and the higher the ollar amount, the more advantageous a flat rate becomes..

Where to start: The best thing you can do is contact various ACH API providers and lay out what your application does, who it serves and what your initial requirements are. A good ACH API provider will likely be able to give your some new insight as to possibilities.

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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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