NationalACH

Archive for August, 2009

Merchants selling on the internet that are not accepting electronic checks are losing business. Offering electronic checks as payments can increase sales by 3-8%. These would be payments for orders that otherwise would have been lost. Depending on the ACH electronic check provider, echecks can also cost substantially less than credit cards for a merchant to accept as a payment method.

Accepting checks online will increase sales by reaching out to households and shoppers who do not have credit cards or do not want to provide credit card information online. One of the limitations of accepting online checks is that the echecks clear through the ACH network and take time to clear. And, there is the risk of bounced checks.

Merchants should wait to ship products until the electronic check clears through the consumer’s checking account. Merchants can get guarantees on online checks by paying extra discount points. But, unless the average ticket on a sale is high, check guarantee doesn’t make sense because, over all, the cost of guarantee will be higher than bounced check losses.

The Canadian Standing Senate Committee on Banking, Trade and Commerce recommended that the government create a payment-system oversight board, ban percentage-based debit card interchange for three years, and permit businesses to charge extra for card transactions.

The recommendation came in response to complaints by Canadian merchants about the high costs of accepting credit cards and consumer groups complaining about credit card issuers’ fees and interest rates.

The Senate Committee hopes the he proposed federal oversight board will make recommendations by Dec. 31 on regulatory or legislative measures  required to fairness for participants in the credit card and debit card payment systems. The will also publish annual information about interchange and other payments fees.

The Senate recommends permitting merchants to surcharge for card payments or discount for cash if merchants display the surcharges or discounts to consumers.  It also recommends a ban on honor-all-cards rules, including high-cost premium credit cards as well as debit cards.

ACH payment info at nationalach.com

Recommendations for debit cards include calculation of switch and interchange fees on the basis of a flat fee, setting interchange at zero for three years, and a ban on priority network routing so that cardholders can select their preferred payment method when using a-badged debit card.

NYCE Payments owned by Metavante announced results of a survey conducted to reveal consumers’ concerns about purchasing online.  According to the report

* Of consumers who never purchased online, 43.5% said the main reason for not buying over the internet was concerns about security.  Of those, 18% would try online shopping if a secure payment method was offered by their bank

* For consumers who never purchased online, 26.4% said security concerns prevented them from purchasing more often.  Of those, 27.6% would buy more often if they could pay securely through their bank.
* 49.9% of consumers who shopped online freque3ntly said they would consider replacing their current method with one offered by their bank or credit union,

NYSE has a product which allows consumers to pay for internet purchased without disclosing debit card information online. The system validates shoppers through their online bank, and generates a pseudo card number for one-time use on a merchant’s site.

At checkout, a popup window appears which links to the consumer’s online-banking site.  The buyer logs into their online bank.  A virtual card with a primary account number and card-verification value good for one-time use is generated which is used to pay for the purchase.  The merchant’s checkout page is auto populated with the consumer’s information, including the virtual-card data.

This type of payment is called a push payment because the consumer “pushes” the payment from their bank account to the merchant.  Push payments have long been used in Europe and are now gaining popularity in the US.

ACH payment info at nationalach.com

These days, it’s amazing that some companies still do not provide customers a way to pay bills online.  Are you a company that bills consumers?  Make it easy for people to pay you by adding a “pay your bill” button to your website.

There are two ways customers pay bill remotely.  First is through their online bank account.  The customer logs in, goes to bill pay, selects the name of the company to pay and authorizes the payment.  The bank will either send the payment electronically or will send out a check to the biller.

Online bill payments through banks have some proponents.  But, it hasn’t taken off as some expected it would do.  One of the reasons is that banks may charge for the service.  For example, my bank, a major US financial institution, charges $6 per month for online bill pay.

The second way people pay online is electronic bill pay via ACH payments at the billers’ website.  If the biller has no way for a customer to pay directly on the site, how is a customer going to make a payment?

It’s a simple matter to add bill payment to your website.  No matter how your customers want to pay you, be sure are equipped to take the payments.  Offer multiple payment options, including credit cards and ACH payments.

For improved account receivables collections, add a “pay your bill here” button to your site today.