ACH Payment Processing is ideal for recurring payments where the business is collecting regular payments for services or goods. Subscription billers should all be using ACH payments.
Here are the Top Reasons:
- ACH Payment processing costs are 80-90%+ less expensive than comparable credit card payments. As an example, if the payment amount is $100 and the customer pays via credit card it’s likely the average cost to process the payment is 2.5% or $2.50. Using ACH that same payment might cost 30 cents saving 88%. If you are collecting hundreds or thousands of payments you are adding 2.2% to your profit margin
- ACH Payment decline rates are significantly lower than credit cards. Think about the last time you changed bank accounts versus the last time your credit card changed. Decline rates for credit cards can easily exceed 10%. In the ACH world decline rates for recurring ACH billing are usually sub 2%. The amount of work involved with updating credit cards can be staggering
- Customers like payment options. Providing more than a credit card payment option makes it easier to get autopay adoption. Go to most any gym and sign up for monthly membership. You will hear “We can debit your checking account or credit card. Which would you prefer?”
- Automated ACH Payments create reliable, smooth cash flow. Knowing you can count on $X/month hitting your bank account makes paying out rent and salaries much less stressful on the business owner
- AutoPay via ACH significantly reduces payment collection costs. Not having to invoice and process paper save businesses $100 or more per customer, year over year
So if you collect recurring payments via ACH Payment Processing is an absolute must.