Open Banking
Open Banking
March 28, 2024
5 min

4 Reasons Why Billers Should Modernize ACH Autopay

Timothy Shin

Open Banking Expert

ACH autopay lets billers and merchants allow their customers to make easy, and consistent payments for their recurring bills. However, ACH still faces many pain points due to its outdated processes that make it difficult to adopt effectively. This friction leads to many customers preferring other payment methods that don’t bring the inherent benefits that modernized ACH autopay can bring, such as reduced cost of acceptance, reduced risk of payment returns or failure, etc. 

Modernizing ACH autopay isn’t as difficult or stressful as it may seem. By leveraging a robust and capable Open Banking platform, you can streamline ACH and take full advantage of the benefits it has for your business. If you’re still on the fence about fixing or modernizing autopay, our blog will go over the 4 key reasons why you should.

4 Reasons Modernizing ACH Autopay is Important 

ACH is often an afterthought when it comes to payments optimization, but it shouldn’t be. Modern consumers want streamlined payments that are easy to make, and ACH can meet that demand better than card when optimized properly. But is there enough justification to modernize ACH for autopay? Let’s take a look at these 4 key reasons why modernizing ACH autopay is critical and brings tangible benefits. 

#1 - Improving Customer Satisfaction

No one likes having to locate a checkbook just to find the account and routing numbers needed to input their credentials. However, with Open Banking APIs integrated into the ACH autopay onboarding process, there’s no need to go back and forth manually entering account information. With the same process of simply signing in with their online banking credentials, the API does the rest. Consumers get verified and authenticated in seconds, and they’re ready to make regular automatic payments with their bank. 

Removing friction-laden outdated processes will directly improve customer satisfaction with your payments setup, as there’s less upfront effort needed to enroll with autopay. Additionally, it’s now easier for customers to make consistent and regular payments easily, which encourages consumers to stay on top of their bills and reduce the risk of skipped payments. Surveys have shown that 23% of millennials prefer to prioritize and set up payment for bills that have the least amount of friction first over others.

#2 - Improving Customer Retention  

Another important reason to streamline ACH autopay is to improve customer retention. 43% of consumers who experience even one friction point in the payments process would be willing to switch billers if it meant easier payments. No biller or merchant enjoys losing customers, and one of the key pain points to address to remedy this issue is to streamline payments. 

As mentioned above, Open Banking eliminates friction. It directly fixes many of the issues traditionally associated with autopay such as manual entry, slow onboarding, and the upfront information required that’s often difficult to locate. By eliminating these factors, your customers can be encouraged to continue using your service and not want to search elsewhere for less friction. 

#3 - Maximizing Revenue and Cash Flow 

Streamlined ACH autopay can drive growth and maximize revenue by removing costly mistakes and reducing the chance of payment failure or returns. ACH returns mean delayed payments and often incur fees for billers and merchants when they happen. Not to mention the overhead cost of repairing broken payments or dealing with returns, which further impacts revenue negatively. Modernizing ACH autopay to the digital age with Open Banking significantly reduces the risk of payment failure. 

Because Open Banking automates the entire payment process, there’s little both the biller and merchant or the consumer can do to disrupt the process in a way that would lead to costly payment failure or returns. All data gets sourced with consumer consent from their bank accounts, meaning there’s no room for error, such as mistyping account numbers or failed verifications. Cutting down on these returns and failed payments means you get to confidently accept regular payments that won’t lead to errors that impact your bottom line. 

#4 - Reducing the Cost of Payment Acceptance 

It’s no news for billers and merchants that accepting cards can be costly. Interchange fees, aka card swipe fees, seem small upfront, but after processing many payments, the margins the card networks take begin to add up exponentially, meaning less revenue from you. Since most billers and merchants are often at the mercy of the current card duopoly, setting rates as they see fit, alternatives such as ACH can be an untapped payments option to prevent revenue loss from payments processing. 

When you modernize your ACH autopay offering and utilize incentives to encourage its adoption, it’s an investment you make to safeguard your cash flow. ACH processing fees are significantly lower than card swipe fees. Don’t think of improving ACH autopay with Open Banking as some sort of cost or loss. Instead, think of it as the setup needed to save money and retain more profits consistently down the line.

Implement Modernized ACH Autopay Offerings Today 

With all things considered, the benefits of modernizing ACH autopay are evident. You can maximize revenue, safeguard cash flow, improve customer retention, and remove pesky friction from your ACH setup, all by leveraging Open Banking for autopay. If you’re feeling stuck and don’t know where to begin with modernizing ACH, Trustly has you covered. 

Utilizing a strong Open Banking platform can thrust your outdated ACH payment system into the modern age easily. Trustly Connect can provide your business with the ability to provide seamless ACH autopay for your customers. Streamline onboarding, automate manual processes, and take advantage of our proprietary risk engine within Trustly Connect and start accepting the new, modern ACH payments today. Contact us for a free demo to learn more.

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