As a business owner, you can offer a wide range of payment options to increase sales and improve back-end accounting. One of the best ways to improve your margins is cutting costs where you can. To do this, most businesses look for an alternative to credit card payments, as they cost more than other payment methods.
One option results in a consistent recurring payment to rely on is ACH (Automated Clearing House) payment processing. Not only does it cost pennies per transaction compared to the average 3%-5% of a credit card, but also is less likely to be declined unless the bank account is closed down or lack of sufficient funds.
Better still, ACH payments do not offer any inconvenience to your customers, so it’s a win-win for customers and your business.
So why don’t all businesses demand their customers pay via ACH payments? Well, there are a few hurdles to overcome to make enrolling your customers.
The challenges of convincing customers why ACH is the right choice
First, you must consider if your business has the right type to require ACH payments. Restaurants, bars would not use ACH payments. But for service-based businesses -lawn care, law office, managed service providers- and their customers would benefit from offering ACH payments as an option.
Second, more often than not, most customers wouldn’t consider an ACH payment unless prompted by your business at the time of payment. For many, it’s a “sure” and you just need to have them sign a form to withdrawal money from their account. For other customers, they will hesitate or prefer to keep their credit card as the primary payment option.
The main objection a customer may have to ACH payments is because they do not want you to have direct access to withdrawal money from their bank account and easy dispute process of a credit card payment.
To help move customers in the right direction, it’s important to know how to answer common questions that arise while the iron is hot. Here are some popular questions that regularly come up.
How to get customers to pay by ACH
Here are a few strategies you can use with new customers and long-term customers, as well as answers to key questions asked about ACH in order to help during the conversion process.
Getting new customers on ACH
Every experience with a new customer sets a precedent, so introducing the idea of payment via ACH payment early on in the sales process as well as when onboarding new customers. Having customers directly in front of you and ready to buy quickly opens doors to this discussion and helps your customers better understand payment options for higher chances of approval.
During onboarding, make sure the sales team explains that every month the customer will be billed through automatic payment withdrawal and that the payments will cease at the conclusion of the contract (subscription, layaway payment, B2B payments, etc.). Also, let them know they will receive receipts for their personal files after each withdrawal.
Usually, if it is present in this way it will meet little resistance. You as a business owner have a right to set the standard of how you receive payment for your services. Setting clear expectations, in the beginning, will remove any confusion and allow your customers to sign an Automatic Bank Withdrawal Form during the onboarding process for their payment details.
Not only does this ensure going forward you will be paid on time for your services, but also smooth over any potential hiccups in the billing department.
Incentivizing ACH payments for long-standing customers
Existing customers are a different story. Many of these same steps apply, getting them to assign an Automatic Bank Withdrawal Form, talking over the new process. The challenge lies in changing the existing expectations those customers have around when and how they pay for their services.
One way to do this is to wait for a time of contract renewal and introduce it then, addressing their concern and setting new expectations. You may receive some pushback over the change, and if that’s the case, it’s time to offer something to offset the change.
Offering a discount on their service agreement if they sign up for recurring ACH payments every month can persuade your customers to get on board with the change. If they agree to ACH payments, give them a slight percentage of their bill, or a lower service rate when you do annual service increases.
If they still resist, it may be time to enforce strict payment requirements. Make contracts or terms of service include clear expectations of the client, including due dates, late fees, and corresponding interest rates. Your accounting staff will need to enforce these rules and be sure nothing slides.
At the end of the day, you’ll need to Do what it takes to get your clients to buy into autopay. Make them understand how the automation process benefits their businesses and give them incentives that make the decision-makers feel good about signing on the dotted line.
The steps for enrolling users in ACH payment processing with banks
Some key information is needed to complete the transactions. You will need the customer’s personal data and bank account details to authorize the movement of funds to your company bank. You will also need a signed authorization from the customer approving payment withdrawal. The entire customer approval process is made easy with pre-made payment forms with user-friendly interfaces.
BNG Payments can install this software onto your registers, mobile devices, and online systems to make electronic payment enrollment fast and easy. We offer the proper authorization forms to complete this important work. You can choose from debit authorization templates for one-time authorizations or authorization form templates of any frequency.
Email Templates to launch electronic payments to your customers
If enrolling a customer in ACH during a sale in a store is too challenging, you can email invoice forms for them to fill out. We offer email template samples to best suit your taste. Email is a commonly used tool for sending automatic email invoices and automatic email receipts.
An alternate option is to have an online payment form available on your website. We also aid with this service. You can also mail out forms to customers to fill out and return.
Other helpful tips for business owners
Though you can choose to submit electronic payments anytime, having it done on a regular schedule ensures you have timely and regular payments to better manage your business. You also save significant time on the back end, helping you complete other more important growth initiatives.
As a whole, ACH payments help with your company goals to reduce the cost of accepting payments for your services compared to credit card processing. But they can also be a great way to implement autopay and reduce the time spent it takes to collect money for services rendered.
Looking for additional ways ACH payments can benefit your business? Contact our team of payment processing experts to find out if ACH payments are right for your business.