According to the National Automated Clearing House Association (NACHA), collection agencies prefer recurring ACH payments from their accounts. As a collection agency or a credit union, you have probably considered setting up recurring payments for customers. Here are four advantages of recurring ACH payments for businesses.
Significant Cost Reductions
ACH transactions usually have the lowest fees of any payment system. A credit card’s fee is typically around 2.5% of the value of the transaction plus a processing fee. ACH transactions usually cost about $0.30 total. As the number of transactions increase the cost savings with ACH transactions can add up quickly.
When you enable recurring ACH payments you no longer have to invest as much time processing daily, weekly or monthly invoices. You set up the recurring payments once and then they happen automatically. Less labor time means lower costs and more time to invest doing important things.
No Missed Payments
With recurring ACH billing, you reduce the risk of missed payments. You no longer have to think about the consumer remembering to mail a check or log into their account to make a payment online. All future payments happen automatically without any human action required.
Here is why this is good: every time a customer opens a paper or electronic invoice from you they make a decision about paying you. In months when money is tight, they might decide to not pay it, or pay it late. Because recurring ACH billing happens completely on autopilot, customers must consciously intervene if they want to cancel future payments.
Greater Client Satisfaction
Recurring ACH payments not only benefit your business, they also benefit your clients. When you enable recurring billing those consumers have one less thing to think about. This is especially good when they are in a collection situation. Automatic payment of the bills by the due date looks good on their record.
If your business is a credit union, anything you can do to make your clients’ lives easier will make your business more profitable in the long run. Customer satisfaction is a critical component of brand-building and sustained business growth. Recurring ACH payments will ensure their loans are paid back and their credit record looks good.
When recurring ACH billing is not being used, customers must upload credit card information, write a check, or input a PIN every time they want to make a payment. Each of these methods exposes users to potential theft, hacking and/or “phishing” for their financial information.
With recurring ACH billing all transactions happen automatically and within the system. This makes it much more difficult for scammers and computer hackers to obtain sensitive financial data. One-time ACH payments are very secure and recurring ACH billing makes them even more so.
So take the time to suggest to your clients who make regular payments to consider a recurring automatic payment plan. Both your clients and you will reap significant benefits. To learn more contact BillingTree or call us at 877-424-5587.