An ACH API offers developers and SaaS platforms the ability to debit and credit bank accounts using the ACH network programmatically via an Application Program Interface.
This allows for automation of ACH payment collection, disbursement and reconciliation.
For applications having a recurring or subscription payments component, an ACH Payment Gateway API is a must have option for platform users.
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Benefits of an ACH API Integration as well as an overview of how ACH and credit card processing differ
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ACH Integration options including REST ACH API, SOAP ACH API as well batch processing
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What to look for in ACH API Provider
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Area of potential concerns including risk mitigation and reconciliation options/challenges
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Case study of a successful ACH Transfer API Integration and the impact on customer acquisition and revenue generation
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Sample ACH API Code
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Sandbox ACH API accounts
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Additional ACH API Resources
Why integrate to an ACH Payments API and how will it benefit your application and business?
First you might be wondering how the ACH world works especially if you have some familiarity with credit cards.
ACH transactions operate differently than credit cards. Credit cards have an authorization component that lets the biller know in real time that the payment is good. The ACH and EFT processing world operates in a batch environment and it can be 24-72 hours before an issue with payment is known. This makes an ACH option very attractive to billers who “know” their customers eg a newspaper billing a monthly subscription but. A business that needs to ship immediately after time of sale may prefer credit cards as the payment vehicle to mitigate payment issues.
There is also a major difference in costs. Credit cards may cost a business 2-3% of the transaction amount whereby an ACH is typically a flat 25-50 cent fee. This can add up. Coupled with much higher decline rates with credit cards ACH payments are a great option for recurring billing.