I think your comment about a "general cross section" of customers hits
the nail on the head as to why there are different experiences on this.
The demographics of the area may play a role as well. If you let the
customer choose between ACH or CC, they'll choose CC because it's safer
and more convenient for them. The person who chooses ACH when given the
option is someone who can't get credit cards or someone who has learned
how to play games with checks.
Just my 2c. I do believe you that ACH was cheaper in the long run, but
back when I was more directly involved in billing ACH rejections were a
very regular occurrence and the service we used charged a fee for each
incident. We passed the fee onto the customer and most of them would
find another way to pay after the first couple times. It was more about
not wanting to deal with the hassle than anything else. CC either
declined or passed and that was it. One and done. I only recall one
guy who disputed a CC charge.
------ Original Message ------
From: "Lewis Bergman" <[email protected]>
To: "AnimalFarm Microwave Users Group" <[email protected]>
Sent: 6/29/2018 9:38:05 AM
Subject: Re: [AFMUG] How ACH works
My cost of doing business was lower, which is why I did it. Maybe yours
isn't. I will say it was a management push on my part to enforce
policies that got everyone on ACH if possible. ACH was free, CC wasn't.
As a result, maybe we had a more general cross section of our customer
base on ACH that you so we didn't huge differences.
And I guess that's why people do it differently. Your experience wasn't
mine. But if mine was 5 times worse I would still find it compelling
from a monetary viewpoint. But, it really wasn't an issue for us from
the PITA point of view because the software handled most of it. Maybe
your customer base was significantly different than mine. We also got a
big kick in ACH enrollment because a bunch of the banks in our area
used the same "Bill Pay" check printing service. As we got one envelope
with 150 checks in it for different accounts, all listing something
stupid like ISP as the account number, and on top of that, payment was
made late. The inevitable calls came in about why they were charged
late fees, they scheduled it payed a week ahead of deadlines, etc. We
would have to explain that we could show them the postmark, the date on
the check, etc. Customer would say "they took the money out of my
account on ...". Our pitch was always that if they let us pull the
money via ACH we wouldn't charge them and they could never be assessed
a late fee if we did the ACH. That got a bunch. But again, our
experiences seem to be quite different.
I just put the possibility of contested CC out there. I don't think we
ever had anyone contest a charge. Maybe once on an install. I don't
remember it if we did. But in my experience, that possibility was
roughly the same as my chances of losing more money doing ACH than CC.
In the end, that is what's great about this place right? I don't have
to do it like you and vice versa.
On Fri, Jun 29, 2018 at 8:06 AM Matt Hoppes
<[email protected]> wrote:
It’s just the cost of doing business.
And yes they do have 60 days to contest it but most people don’t.
We have a small handful of ACH and the number of bounced transactions
that occurred there is much much much higher than anyone contesting a
credit card transactions.
On Jun 29, 2018, at 08:21, Lewis Bergman <[email protected]>
wrote:
If you can't figure it out maybe math is the issue. 25 cents for ACH.
CC is 2.75% and up. If you are doing 400k a month in CC that adds up
to about 10k more in fees. In all the time we did ACH we probably
lost an additional 3k that we would not have lost with CC. So.... 3k
in 10 years is less than 10k in one month.
So why do people still do it...they can do simple arithmetic?
You do raise some valid points. If you have to have the money and
can't wait two days and so want to pay an effective annual interest
rate that is enormous.
If you are drafting the routing and account info is your customers
not yours.
I had someone fraudulently present a check for 92k on my account.
Maybe that proves your point, but the bank credited my account in a
couple of weeks and it really wasn't a big deal to get done. Only
time it has ever happened. So again, the math tells me even if that
happened every year one time instead of once in twenty years, and I
didn't get my money back, I would still be better off using ACH.
But, to each his own. I know a lot of people don't like the 2 day
settlement period for ACH. in truth, CC is longer. You have what...
60 days for someone to contest a charge. While they do it the bank
takes the money back. Not that that is a big risk. Probably about the
same as someone's ACH not clearing.
On Thu, Jun 28, 2018, 9:39 PM Matt Hoppes
<[email protected]> wrote:
ACH is slow (2 days to clear)
ACH is insecure (bank account numbers can be gotten off checks, etc)
ACH can wipe you out (if someone gets those account numbers)
ACH does not provide real-time-feedback (may not know things didn’t
work until it bounces two days later)
Why anyone still uses ACH or checks or beyond me.
A credit card is:
Instant (funds transfer immediately, you instantly know if the funds
are coming or not)
Secure (there is a CVV code required - just having the number gets
you nowhere)
Safe (if someone does steal your card they won’t wipe out your
account and you can quickly get the funds/transactions reversed)
Easy to dispute
I have one vendor I pay via check every month because they won’t
take cards. Otherwise everything I pay personally and business is on
CC.
On Jun 28, 2018, at 21:59, David Sovereen
<[email protected]> wrote:
Same here. ACH saves us a bundle, and once customers are used to
the recurring payment, there are few bounces. Once a payment does
bounce, however, we only take cash or card... guaranteed funds.
Dave
Sent from my iPhone
David Sovereen
Mercury Network Corporation
2719 Ashman Street, Midland, MI 48640
989.837.3790 x151 <tel:(989)%20837-3790> office | 888.866.4638
<tel:(888)%20866-4638> toll free | 989.837.3780
<tel:(989)%20837-3780> fax
Telephone | Internet | Security Alarm Monitoring
[email protected]
www.mercury.net
<image001.png>
On Jun 28, 2018, at 6:51 PM, Lewis Bergman
<[email protected]> wrote:
That's true but if you assess a hefty enough penalty then they pay
you for it anyway. I used to make several thousand a month just
off of late fees and disconnect fees. We assessed a 25 dollar fee
for any NSF.
On Thu, Jun 28, 2018, 4:49 PM Matt Hoppes
<[email protected]> wrote:
Sure but it takes two days for the failure to come back, so the
customer can use that to game the system if they feel so
inclined. With a credit card the acceptance or rejection is
instant.
On Jun 28, 2018, at 17:30, Lewis Bergman
<[email protected]> wrote:
I guess it depends on your billing system, how it cuts off
people, etc. Mine would accept payment, then reverse it and cut
people off automatically. One of the few things it did well. I
was mostly ACH and it saved me a couple of grand a month if I
remember correctly.
On Thu, Jun 28, 2018 at 4:25 PM Matt Hoppes
<[email protected]> wrote:
Hey CH is a pain in my neck. Yes I don’t have to pay fees with
the fees are very small, but I am not guaranteed my money, and
then I have to chase balances and add fees and remove payments.
On Jun 28, 2018, at 17:20, Eric Kuhnke <[email protected]>
wrote:
https://engineering.gusto.com/how-ach-works-a-developer-perspective-part-1/
Might be of interest for those of you whose billing systems
are set up for ACH direct debits via checking account numbers.
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