The consultant who told me to ditch ACH for push payments

Six months ago a payment consultant named Mark from a big firm told me our small business should stop using ACH and switch to push-to-card payments. I pushed back hard because ACH costs us $0.29 per transaction versus push-to-card at 1.5% plus $0.25 per transaction. On a $500 invoice that's $7.75 versus $0.29, so I thought he was nuts. Turns out we were losing about 12% of our clients due to ACH returns and 5-day settlement delays. After switching, our payment success rate jumped from 88% to 97% and we actually collect more money overall despite the higher fees. Has anyone else been burned by ACH return rates or found a cheap alternative that works?

2 comments

2 Comments

gray_schmidt81d ago

Man @jordancoleman actually nailed it though. The math only works if you pretend those failed payments don't exist, which is exactly what I was doing before we switched. Once you add the cost of chasing down bad checks or losing customers entirely, the cheap option stops being cheap real quick.

jordancoleman4d ago

nah i think your math is off a little, you gotta factor in the lost sales from the returns too. those 12% of clients you lost were paying you zero, not $0.29. so the comparison isn't really $7.75 vs $0.29, it's $7.75 vs the $0 you were getting from those 12% of people who bounced. makes the push cards look way better when you frame it like that