12 ms·

When I last worked on a billing system about three years ago, we looked so hard to find an ACH provider. There was just nothing out there. This is an enormous a

When I last worked on a billing system about three years ago, we looked so hard to find an ACH provider. There was just nothing out there. This is an enormous advance. The problem we had was that we issued moderately large invoices monthly - they could be from $1k to $50k. We wanted to be paid quickly, so we tried to convince our customers to pay by credit card (through Stripe) and enable automatic payments, but we had trouble when customers would bump up against credit card limits. So, for our bigger clients, we were relegated to asking for checks to be sent by mail. This meant we couldn't automatically charge customers every month, and instead needed to badger them to send their check - all of a sudden, we needed an accounts receivable team. We couldn't just ignore the problem since these were our biggest accounts, too. Stripe's pricing is almost comically friendly here - credit card transactions are usually in the ballpark of 2.7% + $0.30, so even when card limits weren't an issue, we'd be paying out the nose on the transaction - 2.7% of $10k is $270. The new ACH payments would cost just $5. Anyways, this is a serious accomplishment. The underlying banking regulations and technologies around ACH are thorny. Good job, Stripe!

amluto 11y ago
Wells Fargo CEO can do it. IIRC it wasn't cheap unless you have high volume, though.
- jslampe 11y ago
  I haven't seen it first hand, but lots of our current customers ditched them (and others) after working with their APIs or lack thereof (#xml). In general, ACH just wasn't built to accommodate "platforms" as an entity in the transaction cycle. Banks, while although cheap, have a problem reconciling their infrastructure and processes with today's expectations. Not to mention their services don't package or include other compliance required to leverage ACH legally (KYC, OFAC, reporting, reject handling, etc.). Bottom-line: ACH and traditional providers are not suitable options for today's platforms. Among others, banks are hemorrhaging ACH-related business to companies like Stripe and Dwolla.
  - nemothekid 11y ago
    >Bottom-line: ACH and traditional providers are not suitable options for today's platforms. Among others, banks are hemorrhaging ACH-related business to companies like Stripe and Dwolla. AFAIK, to plug in to the ACH network, you have to work with a Bank that has access to FedACH/ Electronic Payments Network. I know Dwolla has its own Payments Network, FiSync, but the number of banks on this system is very small. So in many cases its not so much that banks are hemorrhaging business, but Stripe/Dwolla are selling KYC, OFAC, reporting, reject handling, etc related services.
  - yalogin 11y ago
    Can you tell me where I can find information about the compliance requirements for ACH transactions?
    - jslampe 11y ago
      How much time do you have? The rule book is like 600-700 pages. The best route I recommend is to engage your bank or processor, like Dwolla or Stripe, with your use case. They should be able to quickly identify what the requirements are for your platform.
DrJokepu 11y ago
It's insane how expensive financial transactions are in the United States. In the UK, the equivalent of an ACH transaction would be a BACS payment, which costs roughly 30p ($0.45) for a small business per transaction, although some banks will do them for free. Many smaller businesses however would just use Faster Payments Service for payments under £10K, which is like wire transfers in America, except they rarely cost more than 25p ($0.35) and once again, many banks will process FPS payments for free for small businesses.
- tomschlick 11y ago
  It's because of all the fraud on the backend they have to fight. I'm sure banks would like nothing more than to have a simple system where they only charge half as much but net 2x the transactions. Lots of overhead with fraud.
  - Someone1234 11y ago
    That doesn't explain anything. The UK has a similar level of fraud, and banks are just as required to pick up the bill as in the US.
    - tyingq 11y ago
      Banks DO NOT pick up the bill for fraud in the US. The end merchant/seller does. Edit: Downvote all you like. It's the truth. When the chargeback comes, you pay Stripe/Paypal/Etc a fee, and they yank the funds out of your account. Whatever item you shipped is gone. Edit 2: The liability shift referred to below doesn't apply to online transactions. Card not present fraud is almost 100% on the seller/merchant. And given that the context is Stripe, well..
      - ceejayoz 11y ago
        That's not true for card-present transactions. Before October 2015, issuers ate the fraud, not merchants. After October 2015, the "liability shift" means issuers won't eat the fraud if it's a chip card and the merchant didn't use the chip reader. Otherwise, they still eat the fraud. http://www.emv-connection.com/downloads/2015/05/EMF-Liability-Shift-Document-FINAL5-052715.pdf http://www.emv-connection.com/downloads/2015/05/EMF-Liabilit...
beachstartup 11y ago
we have a commercial banking platform (from a brand name bank) with ACH origination. did that not work/was that not available to you?
cowsandmilk 11y ago
who are you billing in the >$25k range that doesn't have the ability to send payments via ACH and will do so free of charge. I bill pharma and biotech companies and regularly receive payment via ACH and did not require a service provider and have never paid a fee. I do need someone to reconcile the incoming payments to a particular account, but that really isn't a huge deal (and could be awkwardly automated already as they send an e-mail Remittance Advice the same day). Maybe there is some intermediate set of customers, but for me, any customer paying large invoices regularly already is set up to pay by ACH.
- morgante 11y ago
  I think it's more that you want it to be part of an automated system. Ideally, it should be set up to autobill every month and reconcile those transactions automatically (like what you can do with credit cards). The vast majority of customers do have access to some sort of ACH payment system, but it's not automated. You still have to pester them to pay each month.
baudehlo 11y ago
Yep it's good news. Chargify has been doing it since early 2014, but for a lot of Stripe users it's nice to be able to continue using their API for it.
deleted 11y ago
[deleted]
dpiers 11y ago
Hmm, that sounds a lot like what I was doing a few years ago... Oh. Hey Spencer. ¯\_(ツ)_/¯
hrspandya 11y ago
Have you tried Digital Checks ? https://www.checkbook.io https://www.checkbook.io https://youtu.be/N4X79qkEmog https://youtu.be/N4X79qkEmog ? All the convenience of ACH plus work with non-ACH enabled bank accounts. Not all bank accounts are ACH enabled. Also ACH requires financial/bank info and verification from recipient and while Plaid solves it for some banks the recipient/sender may not be comfortable sharing it. Digital Checks have no such requirements. $1/Check regardless of transaction amount.
- NiekvdMaas 11y ago
  Digital Checks/e-Checks are very fraud sensitive. They usually clear just 5-7 days later and I have seen cases where the merchant lost tens of thousands of dollars.
  - pjg 11y ago
    Digital Checks can clear overnight (just like Check21). Much faster than ACH. As for fraud the rules are no different than ACH.
manigandham 11y ago
With those size payments, why didnt you just send your bank account details and have them ACH/wire payments to you? Usually the hassle is in sending payments, not receiving them.
yalogin 11y ago
Doesn't ACH processing cost a lot less than that? If I remember right, Dwolla used to charge $0.25 and I think they made it free.

amluto 11y ago

Wells Fargo CEO can do it. IIRC it wasn't cheap unless you have high volume, though.

jslampe 11y ago
I haven't seen it first hand, but lots of our current customers ditched them (and others) after working with their APIs or lack thereof (#xml). In general, ACH just wasn't built to accommodate "platforms" as an entity in the transaction cycle. Banks, while although cheap, have a problem reconciling their infrastructure and processes with today's expectations. Not to mention their services don't package or include other compliance required to leverage ACH legally (KYC, OFAC, reporting, reject handling, etc.). Bottom-line: ACH and traditional providers are not suitable options for today's platforms. Among others, banks are hemorrhaging ACH-related business to companies like Stripe and Dwolla.
- nemothekid 11y ago
  >Bottom-line: ACH and traditional providers are not suitable options for today's platforms. Among others, banks are hemorrhaging ACH-related business to companies like Stripe and Dwolla. AFAIK, to plug in to the ACH network, you have to work with a Bank that has access to FedACH/ Electronic Payments Network. I know Dwolla has its own Payments Network, FiSync, but the number of banks on this system is very small. So in many cases its not so much that banks are hemorrhaging business, but Stripe/Dwolla are selling KYC, OFAC, reporting, reject handling, etc related services.
- yalogin 11y ago
  Can you tell me where I can find information about the compliance requirements for ACH transactions?
  - jslampe 11y ago
    How much time do you have? The rule book is like 600-700 pages. The best route I recommend is to engage your bank or processor, like Dwolla or Stripe, with your use case. They should be able to quickly identify what the requirements are for your platform.

DrJokepu 11y ago

It's insane how expensive financial transactions are in the United States. In the UK, the equivalent of an ACH transaction would be a BACS payment, which costs roughly 30p ($0.45) for a small business per transaction, although some banks will do them for free. Many smaller businesses however would just use Faster Payments Service for payments under £10K, which is like wire transfers in America, except they rarely cost more than 25p ($0.35) and once again, many banks will process FPS payments for free for small businesses.

tomschlick 11y ago
It's because of all the fraud on the backend they have to fight. I'm sure banks would like nothing more than to have a simple system where they only charge half as much but net 2x the transactions. Lots of overhead with fraud.
- Someone1234 11y ago
  That doesn't explain anything. The UK has a similar level of fraud, and banks are just as required to pick up the bill as in the US.
  - tyingq 11y ago
    Banks DO NOT pick up the bill for fraud in the US. The end merchant/seller does. Edit: Downvote all you like. It's the truth. When the chargeback comes, you pay Stripe/Paypal/Etc a fee, and they yank the funds out of your account. Whatever item you shipped is gone. Edit 2: The liability shift referred to below doesn't apply to online transactions. Card not present fraud is almost 100% on the seller/merchant. And given that the context is Stripe, well..
    - ceejayoz 11y ago
      That's not true for card-present transactions. Before October 2015, issuers ate the fraud, not merchants. After October 2015, the "liability shift" means issuers won't eat the fraud if it's a chip card and the merchant didn't use the chip reader. Otherwise, they still eat the fraud. http://www.emv-connection.com/downloads/2015/05/EMF-Liability-Shift-Document-FINAL5-052715.pdf http://www.emv-connection.com/downloads/2015/05/EMF-Liabilit...

beachstartup 11y ago

we have a commercial banking platform (from a brand name bank) with ACH origination. did that not work/was that not available to you?

cowsandmilk 11y ago

who are you billing in the >$25k range that doesn't have the ability to send payments via ACH and will do so free of charge. I bill pharma and biotech companies and regularly receive payment via ACH and did not require a service provider and have never paid a fee. I do need someone to reconcile the incoming payments to a particular account, but that really isn't a huge deal (and could be awkwardly automated already as they send an e-mail Remittance Advice the same day). Maybe there is some intermediate set of customers, but for me, any customer paying large invoices regularly already is set up to pay by ACH.

morgante 11y ago
I think it's more that you want it to be part of an automated system. Ideally, it should be set up to autobill every month and reconcile those transactions automatically (like what you can do with credit cards). The vast majority of customers do have access to some sort of ACH payment system, but it's not automated. You still have to pester them to pay each month.

baudehlo 11y ago

Yep it's good news. Chargify has been doing it since early 2014, but for a lot of Stripe users it's nice to be able to continue using their API for it.

deleted 11y ago

[deleted]

dpiers 11y ago

Hmm, that sounds a lot like what I was doing a few years ago... Oh. Hey Spencer. ¯\_(ツ)_/¯

hrspandya 11y ago

Have you tried Digital Checks ? https://www.checkbook.io https://www.checkbook.io https://youtu.be/N4X79qkEmog https://youtu.be/N4X79qkEmog ? All the convenience of ACH plus work with non-ACH enabled bank accounts. Not all bank accounts are ACH enabled. Also ACH requires financial/bank info and verification from recipient and while Plaid solves it for some banks the recipient/sender may not be comfortable sharing it. Digital Checks have no such requirements. $1/Check regardless of transaction amount.

NiekvdMaas 11y ago
Digital Checks/e-Checks are very fraud sensitive. They usually clear just 5-7 days later and I have seen cases where the merchant lost tens of thousands of dollars.
- pjg 11y ago
  Digital Checks can clear overnight (just like Check21). Much faster than ACH. As for fraud the rules are no different than ACH.

manigandham 11y ago

With those size payments, why didnt you just send your bank account details and have them ACH/wire payments to you? Usually the hassle is in sending payments, not receiving them.

yalogin 11y ago

Doesn't ACH processing cost a lot less than that? If I remember right, Dwolla used to charge $0.25 and I think they made it free.