Recurring ACH API For SAAS Platforms

GaryNunez

For SAAS platforms an integrated payment processing solution offers the following benefits:

  • Creates a more useful application for end users
  • Creates a “stickier” solution for end users. When your SAAS application is responsible for collecting their revenue they are reluctant to change SAAS providers
  • Creates a more valuable company. Integrated payment processing can offer a revenue share model. As this recurring revenue stream grows it adds to the multiple your business might sell for

If your user base collects recurring payments eg a dance or yoga studio then integrated payments are essential. Recurring ACH Payments Processing offer 2 distinct advantages over traditional credit and debit card processing and deserve strong consideration for your application:

  1. Processing fees can be up to 90%+ less expensive than credit cards
  2. Credit card decline rates are typically in excess of 10% with many businesses experiencing 15%+. In the ACH world that decline rate is typically sub 2%. You can see why-how often do you change your bank account versus how often you receive a new credit card?

So what do you want from a Recurring ACH API?

Sensitive data protection

Assuming the API supports data tokenization, a clear advantage to utilizing an Recurring ACH API is that sensitive bank checking and savings account data is never stored within the SaaS application or it’s servers. Instead, the application can communicate with the gateway in real-time to post bank data and be returned a reference token to be stored for future use. This eliminates the potential for theft of sensitive data. While NACHA doesn’t currently mandate PCI requirements for ACH transactions, most any ACH gateway that also supports credit card transactions will be PCI level one certified. Why risk theft of merchant customer’s bank account data when you don’t have to?

Risk mitigation

For many merchant organizations, just transmitting the Recurring ACH transactions isn’t enough. By utilizing a real-time gateway API there can be additional calls made that can reduce risks to their organization. Below are some real-time risk mitigation tools that can be helpful:

  • Transit routing number validation
  • Bad account database check
  • Bank account number validation

Reconciliation and reporting

Data can be delivered as soon as the gateway receives it from the RDFI banks instead of waiting for a cron delivered file. Because the SaaS application is integrated via the recurring payments API, this data can be automatically posted and reconciled. In addition, notifications can be triggered depending on the type of notification delivered.

For example, a settled ACH transaction post can trigger a message to customers or internal personnel of the event. Non sufficient funds messages delivered to the application can trigger a series of NSF re-presentment tries and, subsequent to a successful recovery, can trigger an NSF fee debit transaction to be originated.

Any organization that utilizes a software application and has a need for transmitting ACH transactions should further investigate ACH Integration and the advantages of integrating to a Recurring ACH API.