Posted by NationalACH on Jan 07, 2014
SaaS ach payment

Echecks for SaaS Providers

Cloud computing including Software as a Service (SaaS), represents one of the fastest growing markets for ecommerce.

The reasons are easy to understand.  Businesses recognize the value of selling services through the cloud.  Updates are handled automatically; there are no deployment costs; and there is no need to ship a product.  Recurring billing models stabilize cash flow and create a predictable revenue stream.

For end-users, paying for a product on a subscription basis is an inexpensive and easy way to access desired software applications.  Once users agree to recurring payments, they get used to seeing the charge on monthly statements and continue to pay regularly.

The more ways SaaS can accept payments, the more sales will be made.  Card payments, of course, are necessary.  Yet accepting payments with via the ACH network (echecks) extend customer retention and increase lifetime value of customers

Advantages of Echecks Over Cards for Recurring Payments

Recurring billing models are a standard feature of SaaS payments.  Payments are remitted on an on-going basis in exchange for accessing the software applications through the cloud.  Two common payment methods are cards and echecks.

One of the biggest issues with accepting card payments for recurring billing is that 1 in 5 cards are reissued every year.  Therefore, during every recurring billing cycle, a significant number of transactions are declined. Merchants are required to find ways to update card payments in a cost-efficient manner while avoiding having the customer cancel the service.

Echecks are more stable for recurring billing.  Echecks use the ACH network to automatically debit funds from buyers’ bank accounts and settle the money to merchants’ accounts. Bank accounts rarely change.  Current bank accounts are used for direct deposits and direct debits for ongoing bill payments. For most Americans, changing bank accounts is far too much trouble.

In addition, echecks let SaaS providers capture sales from buyers that do not have cards or are maxed out on cards.  And, due to the rapid rise of automated billing, Americans are comfortable paying for subscription services through the ACH network.


SaaS providers that accept checks online get orders from buyers that don't have cards, are maxed out on cards, or who prefer to pay with an electronic check rather than cards.

Echecks trump cards for recurring billing. Stablizing cash flow. And increasing the lifetime value of customers.

Are you a SaaS provider interested in protecting your recurring billing income?  

Contact today