ACH and credit cards for recurring payments

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Two Main Reasons

If your application or SAAS offers recurring payment functionality offering both ACH and credit card processing is almost mandatory. There are 2 major reasons: 1- Cost savings and 2-Rejection rates. 


First up-cost savings

Consider ABC Security company billing 5000 customer per months at an average of $40 billing. Let’s consider all payments are done via credit cards. The blended rate ABC is paying is 2.6%. That means every month ABC is paying around $5200 to collect payments. $64000 per year. 

Contrast this with those same customers paying via ACH. ABC pays 25 cents per transaction and $1.00 per ACH Return. Their return or payment reject rate is 1.5%. Their bill for collecting those same 5000 payments via ACH? $1325. Maximus is saving over $46000 per year on payment processing costs. By offering an ACH Processing option your application can offer serious savings.


Next up, Credit Card Rejection Rates

The second compelling reason you should consider an ACH alternative to credit cards is payment rejection rates. With EMV and common data breaches over 30% of credit cards are re-issued each year. This creates credit card reject rates that range from sub 10% to over 30% with 15% reject rates common. This is a massive issue for businesses. Not only are they losing 15% of their monthly revenue or more they then have the added work of getting cards updated and then rebilling.

You can run savings analysis plus revenue lift from improved rejection rates with our ACH savings Calculator.

When cost savings are combined with the significantly lower reject rates as compared to cards you have a compelling reason to consider adding ACH processing to your platform. Your application will offer a better solution for your users and the ACH component will be  a competitive differentiator for your SAAS.

Combined with our revenue share model for integrated partners you can drive significant bottom line growth to your business.


Need more information?

We have been doing this for 20 years. Contact us and we will explore your options with you.