ACH Recurring Billing, also called e-Checks, offer lower transaction rates than Credit/Debit cards. However, there are some important things to know before deciding if ACH Billing is right for you and your business.
Flat Rate Fee’s
ACH Billing offers a flat $1.00/transaction rate. Regardless if the recurring subscription amount is $50 or $500, the fee is always just the $1. Compare that to a Visa/MasterCard credit card, which for most merchants is 2.99% + $0.30. That translates into $1.80 in fee’s for a $50 subscription.
Different Processing Times
Credit Card transactions take 1-3 business days to clear, while eChecks take 3-5 business days to clear.
eChecks Can Bounce
Unlike credit cards, an eCheck will always receive an “approval” during the transaction. There is no system in place that verifies the customer has available funds. Should the eCheck bounce, it is treated similar to a credit card chargeback and an effort is made to request those funds from the customer. A $10 non-refundable fee applies when an eCheck bounces.
Helpful Tip: Consider using ACH Billing only for your most trusted customers.
If you allow ACH billing, you must obtain authorization from the customer. CustomerVault makes it very simple to create an ACH Authorization Form that your customers sign and agree to digitally.
Different Dispute Policies
An ACH transaction can be disputed for different reasons than a normal credit card chargeback. Those reasons can include:
- No authorization received
- Processing date was prior to authorization
- Transaction was for a different amount than authorized
* if using ACH Billing, ensure your customers are aware and agree to when their funds will be removed from their checking account.
Contact us if you have any questions about how ACH Billing can help your business. ACH Billing requires additional underwriting to be approved for use on your CustomerVault account.