We recently finished our integration for a new Automated Clearing House (ACH) Feature for batch payments in the Club Prophet software. While ACH has been around for quite a while, the problem is that every bank has a unique format for accepting ACH transactions. There is no standard. The new interface we have allows us to use a standard format and the gateway will reformat the transaction as needed for your particular bank.
This is a great way to collect customer dues and monthly bills. It requires bank routing and account numbers from your membership (those numbers are printed on the holders' checks) and replaces the need to have Credit Card on File for this process. You likely use this yourself for utility bills as well your Club Prophet Systems service.
There are two huge benefits to doing this...
ACH data is outside the scope of PCI. So anything you can do to avoid storing credit card data (after authorization) reduces your risk in the PCI world. It can also reduce your annual Self-Assessment Questionnaire (SAQ) scope of work if you can eliminate storing Credit Card on File.
It is significantly less expensive. Let’s say you have 400 customers and a customer's average bill is $300/month.
If using Credit Card on File with an average effective rate of 2%: $300 x .02 = $6.00 fee per credit card /transaction.
With the ACH service, you pay a monthly fee of $39.95 plus $0.30 per transaction. Same as in the example above, assume you have 400 accounts. For comparison purposes, you would spread the monthly payment over the number of accounts and add on the $0.30 fee: $39.95/400 = $0.10 + $.30 = $0.40 fee per ACH transaction.
Over the hypothetical 400 accounts at an average bill of $300 ($120,000 gross revenue) for one month: Credit Card fees would be $2,400 vs. ACH fees which would be $160. A savings of over 90%!
In addition, chargeback fees on credit cards are typically around $25.00 each and with ACH there are no chargeback fees.
Plug in the actual numbers for your club and you will see it’s a "no brainer" from a cost perspective but there is some work to do.
You need to:
Reach out to your customers/membership and collect Bank Name, Routing and Account info (a voided check works) in place of (or in addition to) their Credit Card on File data.
Get their permission to debit their bank account (we can get you a sample form if needed) for the monthly billing cycle.
Flag the customer account to use ACH.
Remove (if desired) their Credit Card on File data.
You may want to keep Credit Card on File for other purposes, but if you only use it for the customer's monthly billing then we would suggest you delete it if you move them to ACH processing to reduce PCI-related risk. Also, with ACH it may take longer to receive the cash deposited in your bank account. We have found that it can take 1-2 business days for a credit card deposit vs. 2-4 business days for ACH deposit into your bank account.
Once you have the initial data entered for each account, there is a simple “Batch Pay on Account” feature available from the CPS Sales screen. Here you have a few options:
Retrieve and auto-ACH each account for their outstanding balance for your billing period*.
Run a custom batch where you select each account and the amount to be paid via ACH (for example, a one-time assessment or charge for an upcoming event).
You can also set a flat payment amount for an individual customer account (for example, a customer pays a flat $200 per month, regardless of their account balance).
After a batch is run, the software will also make adjustments for any rejected ACH transactions. You can use this Batch feature to charge credit card on file as well (though obviously it will cost you more from the card processor).
*CPS Private Club Billing module required to auto-populate outstanding balance.
To get started, you need to get an ACH account. We have a simple and secure online registration form on our website to get you started. Just CLICK HERE. You will need your Tax ID (or SSN if sole proprietorship) and your Bank Routing and Account number (the funds are deposited to your bank account via ACH). Filling out this form gets the process started and CPS will provide FREE TRAINING and FREE SETUP for you.