Canadian Electronic Funds Transfer (Canada EFT Processing) provides a convenient and cost-effective solution for managing Canadian ACH or e-check transactions.
Canadian EFT processing or Canada ACH Processing allows Canadian based businesses the ability to debit checking accounts for one-time or recurring payments. It is important to note that in contrast to credit cards cross border payments are not available meaning funds are collected and settled in the same denomination. So a US company looking to debit Canada customer’s would need a Canadian bank account to settle funds into.
In the US there are many providers that offer an ACH processing solution. For EFT Processing in Canada your options are much more limited as a handful of banks control the payments ecosystem. It can often be difficult to gain access to the Canada EFT processing capabilities.
By partnering with AgilePayments you can leverage an easy to implement solution to debit or credit Canadian bank accounts electronically. This dramatically reduces time and money spent on payment collection.
Integrating Canada EFT Processing or Canada ACH processing as a stand alone or in conjunction with US ACH processing offers SaaS platforms a way to automate the payment collection and reconciliation process. A single system to manage both U.S. and Canadian e-check transactions and reporting data for reconciliation can be a powerful customer acquisition tools as well as a payment revenue generator.
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By initiating recurring payments or one-time payments from your application you make your end users business life more efficient and profitable.
Key Benefits and Features of Electronic Funds Transfer Canada | Canada EFT Processing and Canada ACH Platform:
An EFT Payables solution from Agile Payments allows your business or SaaS platform to:
- Manage your cash flow more efficiently and improve cash forecasting. Knowing your business has reliable predictable cash flow makes planning much simpler and less stressful.
- Reduce operating expenses associated with collecting/ writing cheques, manual processing, and time spent reconciling accounts. Ask someone working in the collections process how much fun it is to call people asking for payment.
- Accelerate your payables process and control the timing of credits/debits to your account. Again business planning becomes much simpler.
- Receive notification of rejected payments. Many times, and especially if working with a bank’s Canadian EFT tools, you are forced to manually deal with payment rejects. Often these can take a week or more to receive notification on.
- Reduce lost and stolen cheques. By moving money electronically you reduce risk of paper cheques being lost or stolen.
- Mitigate the risks associated with cheque fraud and forgery. Again risk is reduced and mitigated with fewer paper cheques.
- Preserve the autonomy of your business units while ensuring centralized concentration and control of funds. Automation and systems are the key to scalable growth. An automated Canadian EFT solution is a big step in business growth
- Reduce employee and bank service charges. Making bank trips and paying per check fees are both bottom line drags on your business. A Canada ACH solution automated these tedious manual involved tasks.
For SaaS platforms, Canadian ACH Integration offers a pathway to create a more useful and sticky end-user solution as well as generate new revenue streams.
The On-Boarding process for an Organization who seeks Canadian ACH | Canadian EFT Integration
For many organizations the on-boarding process is extremely important. To simply have an ACH integration option may not be enough. Many organizations prefer for the on-boarding process to be a “white label” process, where the third party ACH processor remains in the background. This means the EFT integration must provide a way for the organization to pass their merchant’s data that is required by the ACH processor’s underwriting department – ideally with everything in electronic format, including signatures.
This means the API must provide the ability for the application and underwriting process to be presented on their website, as though the ACH payments solution is coming from them, pass the underwriting data to the processor, notify the parties involved where the application stands and pass API credentials to the applicant user once the merchant application has been approved and enrolled. In some cases the credentials are passed to the merchant themselves in the case a SaaS application requires the merchant user to enter API credentials themselves, and in other cases the API credentials are passed to the SaaS organization for entry oh behalf of the merchant. It all depends on the Canadian ACH integration path that the SaaS organization chose.
So what should you look for in an Canada ACH Integration API?
- API availability: Does the partner offer RESTful, SOAP Canadian ACH transaction integration or both?
- What other payment utilities are available?
- If your market base includes Canada, does the partner provide a single API for both US ACH and Canadian EFT?
- Does the platform meet PCI Security standards even though NACHA does not require ACH transactions to be PCI compliant?
- ACH Integration–The Missing piece?
- Is sensitive data tokenized and can a call be made to immediately tokenize the bank account data prior to an origination?
- Are there opportunities to leverage the Canadian EFT Processing Integration for your apps’s revenue stream?
- Are there ancillary utilities available from the ACH API to make calls for anti-fraud and risk mitigation?
- Does the partner provide assistance in ACH payments processing adoption for you and your user clients? Simply offering a payment method is not enough to get end user adoption.
- Are there risk acceptance models available that could lower processing costs?
- Are there white label possibilities that might allow for a branded processing option, keeping the ACH processor behind the scene?
- Is there an API that would allow your customers to apply from your site or app?
- Will your potential partner take the time to understand your business requirements and provide options that custom fit the payments needs to your needs and your clients?
- How long has your potential integration partner been serving the needs of app providers and what is their track record?
That’s just a start at some of the common questions you might ask. With Agile Payments, we take the time to learn your business requirements and needs first. We have ACH app clients in sectors that span a wide spectrum. In every case we have become a valuable and trusted partner to these providers–to the point where we help in other business areas [eg client acquisition strategies]
For some organizations where easy onboarding is paramount and the goal is to have clients enrolled and processing payments thoughts should be given to Canadian Payment Aggregation or Canadian Payment Facilitation [PayFac].
A Payment Aggregator or Facilitator [Payfac] can be thought of as being a Master Merchant-facilitating credit and debit card transactions for sub-merchants within their payment ecosystem. Becoming a PSP [Payment Service Provider] lends itself well to some businesses that fall into the software provider classification. Some well known payment aggregators or Payment Service Providers [PSP’s] are PayPal, Stripe and Square.
The advantages to the Canadian Payment Facilitator model
- Speed of boarding process: Being a Canadian Payment Facilitator allows you the ability to setup sub-merchants very quickly, removing a choke point to new client acquisition.
- Customers love that it is so easy to get the account going with no paperwork or documentation burdens. This dramatically improves the client boarding process.
- Payment aggregation as business model
- Buy a Square reader at Walgreens, go online and create your account and within 30 minutes you can be swiping payments. That’s a very attractive acquisition tool.
- Merchant Control: Sub-merchants are under contract with you, the Master Merchant.
- Flat fee structure: Easy to understand flat fees for your merchant customers. No needs to understand interchange tables.
- Earnings: Master merchants are able to earn money from network and transactional fees, and potentially float. This is the big one for most SaaS platforms contemplating going the aggregation route. FinTech has seen massive investment and the main attraction is recurring revenue. As long as people are taking payments revenue + profit is being generated. Think about a regular business selling widgets. Unless those widgets are razor blades the purchase frequency can be months or years. Contrast that with a business taking payments. You can see the allure of the payments business and why SaaS platforms look at Canadian payment aggregation.
Revenue is derived simply from the difference in buy rate from the processing networks and the sell rate charged to the end customer. For illustration, if a Payment Facilitator knows their true overall cost amounts to 2.4% of processed volume and they sell at 2.9% their margin is .5% of dollars processed. If they process $10,000,000 per day that works out to $50,000 in revenue per day. Very attractive business model and you might say sign me up.
There are of course downsides. These include integration and compliance costs as well as risk mitigation. If you are interested in learning more about Canadian Payment Aggregation contact us.
Contact us now for more information on Canadian EFT Processing