With every domestic merchant account inquiry we receive, whether it results in an approval or decline, we’ll always ask the question: ‘Can we interest you in a check or ACH processing solution?’ At first, most merchants decline our offer.
See, in the event of an approval, having some type of option for check processing is beneficial for two reasons. Firstly, the high risk merchant account landscape is unpredictable. Acquiring banks sometimes deem certain industries too much of a risk and cease offering credit card processing with little notice. Having a check processing solution – either echecks or ACH – can carry a merchant over until s/he finds a new solution.
Secondly, we often receive inquiries from merchants who can’t get a merchant account due to industry type, processing history or perhaps they landed on the Terminate Merchant File (TMF). An echeck payment solution in place of credit card processing is a stellar option, even for an e-commerce business, and can keep a merchant’s business open until they are deemed fit to get a merchant account.
ACH processing and check solutions keep a business’ doors open
‘The 20th century called. It wants its check solutions back.’
We get it. There is a fair population of merchants that might argue that check processing solutions are irrelevant, that they are not nearly as robust as the many solutions in an already overcrowded payments market. To that, we say check processing has never been more relevant.
NACHA, the governing body of the Automated Clearing House, made a courageous, industry-changing decision four years ago when it began the process of converting check clearance from three days to same day.
Recently, we blogged about a relatively new echeck solution we’ve launched for North American merchants — a viable (and underrated) payments solution particularly attractive to the highest of high risk e-commerce merchants, and/or merchants whose payments and payout methods aren’t reliant on credit or debit cards.
It has proven to be wildly popular.
The industries that need ACH and check processing
Recurring billing/Subscriptions: I used to pay for my kids’ school lunches each month, often getting a reminder that their balances were running low. Then a few years ago, I decided to set up the ACH option, so that when the balances reached a certain level, funds were automatically replenished regularly, for which later, I’d receive a statement. ACH is a terrific solution for any business that involves recurring billing, such as a monthly subscription to a magazine or newspaper; vitamins, supplements, or health clubs.
Debt collection: Merchants who are trying to receive an outstanding debt from a consumer with a bank account should opt to collect debts via affordable, recurring ACH installments.
Property management: To collect rents, property managers and landlords are well suited to have their tenants complete an ACH form, automatically deducting rents each month and virtually guaranteeing punctual payment.
Loans or lending services: Back in May, we reported how the U.S. Office of the Comptroller of Currency was urging U.S. banks to begin offering small installment loans so that they can compete with small business lenders such as OnDeck and Lending Tree. Where OnDeck and Lending Tree have banks beat is the time it takes for a borrower to get an approval. We know of a local restauranteur who approached both a bank as well as a small business lender for loan needed for several upgrades to his kitchen.
- The bank offered no guarantees and noted it may take as long as a month for an approval or decline.
- The small business lender came back with an approval in three days. The restauranteur went with the small business lender, even though the interest rate was higher.
It’s been found that merchants will opt for faster approvals with higher interest rates, rather than wait one month.
Our point: A boon to ACH processing?
Regarding the aforementioned case, we think the U.S. Comptroller’s recommendation is going to create more healthy competition among banks and lenders, and perhaps even lower rates for borrowers. The result will be a boon to an already growing ACH processing industry (ACH transactions have increased from 5.49 billion transactions in 2017 to 5.97 billion in 2018, an 8.7 percent increase).
ACH processing possibilities
Instabill is partnered with several acquiring banks that offer ACH processing for e-commerce businesses and offers the best solutions to fit a merchant’s needs.
Our merchant account managers prefer to have an initial conversation about your business to discover your needs and the array of possibilities at your disposal. We’re available Monday through Friday, 8 a.m. until 6 p.m. at 1-800-530-2444.
Have that conversation today — chances are we have an ACH payment processing solution for you.
