Electronic checks (echecks) are particularly beneficial for merchants that offer recurring billing or subscription payments. Echecks are a stable payment option for merchants that are interested in protecting cash flow for recurring payments.
The more payment options you provide your customers, the more sales you will generate. Of course, cards are important. Yet merchants are happily surprised to discover that accepting echecks are an easy way to increase sales while reducing the risk of revenue leakage.
Every year, one in five cards are reissued. Cards are reissued for many reasons. Expired dates on cards, identity theft, and data breaches are among the most common.
Each time a card is reissued, you need to obtain the new card information to continue recurring payments. Until the new cards are on file, payments are interrupted, seriously impacting cash flow.
Security and data breaches are growing and causing millions of cards to be reissued. For example, this last holiday season Target experienced a breach that affected more than 70 million individuals. Many customers demanded that new cards be issued because of fears that card data was compromised.
Keeping card information updated creates a real challenge for merchants. A problem which simply does not exist for customers who are paying with echecks.
An electronic check automatically debits buyers’ bank accounts and electronically deposits the funds to merchants’ bank accounts. Over 95% of American households have bank accounts which can be used for recurring payments.
Once a bank account is in place, it is seldom changed. Most people have wages directly deposited to their bank accounts. And, the majority of Americans already pay monthly bills with via debit from their bank account. Changing a bank account is simply too much of a hassle.
Echecks create long-term cash flow stability. Once a recurring payment is in place for direct debit from a bank account, the revenue flows in a regular basis.
No need to update accounts. No need to worry about lost cards, security breaches, or expired dates. Money continues to flow to you with no interruption.
Electronic checks trump cards for recurring billing transactions.
Interested in protecting cash flow from recurring payments?