7 things you should know before setting up ach billing

7 things you should know before setting up ACH billing

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Outline1. ACH billing tends to have lower

transaction fees

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Average transaction:$50

Credit card fee:2.3% - 2.9% + $0.30 (flat)

Cost of transaction: $50(2.3% - 2.9% )+ $0.30 ___________

$1.45 – 1.75


1. Lower transaction fees

Average transaction:$50

ACH fee:$0.55 (flat)

Cost of transaction:

$0.55

Lower transaction fees


Outline1. ACH billing tends to have lower transaction fees

2. ACH billing has different processing times


2. Processing times Credit card

2-3 days

ACH / eCheck3-5 days

Paper checkVaries, depending on bank


Outline1. ACH billing tends to have lower transaction fees2. ACH billing has different processing times

3. Yes, ACH billing is different than a debit card transaction


3. Different from debit card transactions

ACH ACH billing is different from the more common debit card

transaction You get bank account info from customers They use different processors They follow different policies

Outline1. ACH billing tends to have lower transaction fees2. ACH billing has different processing times3. Yes, ACH billing is different than a debit card

transaction

4. ACH billing payments can still return for NSF


4. Non-sufficient funds ACH payments can return as NSF, even if the transaction

initially goes through Similar process to paper checks, since the account

balances are not instantly checked The electronic transaction simply checks that the bank

account exists Consider limiting ACH billing to trusted customers or

clients



transaction4. ACH billing payments can still return for NSF

5. ACH Transaction fees will be debited separately from your other transaction costs


If you accept other forms of payments, note that ACH fees are debited separately from gateway costs or credit card fees

5. ACH fees are debited separately


Business Bank

Account

ACH Fees

Credit Card Fees

Gateway Costs


transaction4. ACH billing payments can still return for NSF5. ACH Transaction fees will be debited separately

from your other transaction costs

6. ACH billing requires authorization


6. Authorization required! ACH billing still requires authorization Authorization forms are sometimes used for ACH billing,

similar to a signature on a credit card receipt Other times, authorization can be obtained over the

phone Different types of customer authorizations:

Variable amounts Recurring amounts Varying days Maximum (or “do not exceed”) amounts


transaction4. ACH billing payments can still return for NSF5. ACH Transaction fees will be debited separately

from your other transaction costs6. ACH billing requires authorization

7. ACH billing has different dispute policies than credit cards


7. ACH dispute policies NACHA’s three reasons for ACH dispute

charges:1. No authorization2. Processing date was prior to authorization3. Transaction is for different amount than

authorized

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