If you haven't considered using ACH or eChecks to get paid, you just might be surprised at how easy it is, how much time and money it can save you, and that you might actually be using it already. Best of all, it can integrate right into Salesforce so your accounting and sales team can invoice and process payments seamlessly.
The terms ACH (Automated Clearing House), eChecks and EFT (electronic funds transfer) are terms that are often used interchangeably for bank-to-bank transfers here in North America. Other countries have different networks for money transfers. In Europe, the Single Euro Payments Area (SEPA) covers 35 different counties. The UK however uses Bacs Payment Schemes Limited (Bacs), Australia has Direct Entry, and Canada uses the ACH system, just like in the USA.
Regardless of the country and the network, eChecks allow businesses or individuals to transfer money directly from one bank account to another by simply obtaining authorization and then providing the account and routing numbers often seen at the bottom of a paper check. This is likely what you're doing right now for payroll, and you could apply the same process so your customers can make paying their invoices faster and easier.
Establishing a merchant account so your business can accept eCheck payments is a simple process. You will need both a payment gateway and a payment processor. Some companies bundle both services. There are several different payment processors and payment gateways available and you should find one who offers options that suits your specific business needs. To completely integrate the process into your operations and your CRM, you can connect the payment gateway directly to Salesforce through Chargent which acts like a virtual terminal for controlling the entire process.
For your customers, the process starts with your business receiving authorization for the transaction from the customer. Usually this is done with an online payment form or order form. The banking information the customer gives you is input into a payment processing software like Chargent where you can designate it as a onetime or recurring payment that can include scheduled payments. You can send a customer a payment request or invoice directly from Salesforce, and once they submit a payment, the funds are verified within 24-48 hours and transferred from your customer's bank account to yours usually within 3-5 business days.
There are many advantages to using eChecks, but for most companies, they like the speed and simplicity -- especially when integrated right into Salesforce -- and the ability to reduce fees.
The eChecks process means that you can forego many of the traditional steps around invoicing and receiving payment. You can eliminate the time it takes for a paper check to arrive in the mail, your accounting team to document it and take it to the bank, and your bank to process the check and deposit the funds. Plus you are automatically pulling the funds with Chargent initiating the ACH transaction, instead of waiting to receive a paper check.
The transaction time for an eCheck is generally between 3-5 days. Credits cards can be slightly faster but have higher fees, and a paper check can take anywhere from 5-6 business days to clear once you've deposited it. In the United States, the eCheck industry will soon be even faster with the National Automated Clearing House Association (NACHA) plans to roll out same day transfers in the fall of 2016.
With some system setups like Chargent and Salesforce, you're able to set recurring payments to help ensure prompt, on time payments for subscriptions or recurring invoices. eChecks eliminate the need to follow up on lost or incorrect paper checks, payment failures because of expired credit cards, or other potential problems with traditional payments. While eChecks can result in Non-Sufficient Funds (NSF) as with paper checks, customers cannot dispute a payment unless it meets one of three criteria: it wasn't authorized, it was processed earlier than the agreed date, or it was processed for an incorrect amount. For many companies, this all means they are better able to manage payments and improve their cash flow.
For companies who manage their customer relationships with Salesforce, the ability to manage eCheck invoicing and payment options directly from the system helps save time and improves work flow. Chargent allows you to manage the eCheck invoicing directly from Opportunities, Cases or the custom Chargent Orders. Plus, your sales team or accounting department can email payment links directly from Salesforce to a customer to expedite the payment process. With payment request invoicing, you can also see transaction updates in Salesforce as soon as they happen. Chargent creates a Salesforce popup window in your payment gateway, keeping your customer's account information secure.
Many adopters of eChecks see immediate savings in transaction fees especially when compared to credit cards which traditionally have the highest fees in the industry. Credit card fees can be as high as 3.5% with an additional transaction fee of as much as $0.30 per transaction. The costs you'll incur to accept eCheck payments will depend on the type of merchant account you have. Some offer per-transaction fees and some offer percentage-based fees typically ranging from $0.25 to $0.75 per transaction or 0.5% to 1%.
Here is an example:
Your business has 5,000 transactions each year valued at an average of $1,000
|Credit card - 2.9% and $0.15 per transaction.||$146,500 annually|
|eCheck percentage-based - 0.75%.||$37,500 annually|
|eCheck per-transaction - $0.50.||$2,500 annually|
Generally, if you're dealing with few, large transactions, a per-transaction fee is more desirable. A business with many small transactions might benefit from the percentage-based option. So, it's important to shop around and understand your options.
eCheck and the ACH process adds security to payments for both you and your customers. For your customer, they understand that all payments must be authorized through an online payment form, order form, or phone call and they can dispute any payments made without this authorization. Some companies choose to use digital signatures or public key cryptography for the authentication process to help ensure their customers' privacy.
Many companies who offer eCheck payments also give their customers additional peace of mind by adding tokenization. You can manage this through Chargent and it essentially allows you to store a customer's information in the form a token instead of their account information so they do not have to worry about vulnerability of their data. Chargent's Payment Console also helps keep your customers' information secure between your payment gateway and Salesforce.
Through some payment processors, you can also offer two-way micro payments as a way to authenticate the transaction. To do this, there are two very small deposits made into both the customer and business owner's accounts. The customer has to verify the amount deposited into their account in order to verify their account information and begin the eCheck process.
For your business, the use of eChecks reduces the risk to you of fraudulent payments or forged paper checks. The same processes that authenticate your customers and verify their account information will help protect you as well.
Having more than one payment option is important to some customers. They may prefer not to share credit card information or incur the costs of writing checks. Providing multiple options could be an advantage over your competitors. For customers, eCheck options also give them the ability to instantly make a payment -- which is convenient if an invoice is forgotten and the deadline for payment is imminent. With Chargent integrated with Salesforce, a customer also receives an automatically generated receipt of the transaction for their records.