Open Banking
Open Banking
March 6, 2024
5 min

Maximizing Revenue and Safeguarding Cash Flow: The Benefits of ACH Autopay for Billers

Timothy Shin

Open Banking Expert

ACH autopay is an effective and convenient way for customers to “set it and forget it” regarding their monthly/weekly/annual payments. While customers can utilize various payment methods, such as cards, to set up autopay, many billers are already aware that high card interchange fees make it difficult to maximize revenue from recurring payments. ACH autopay allows billers to avoid card processing fees entirely and accept payments for less. Despite these benefits, most billers find ACH autopay optimization and increasing adoption difficult, mainly because traditional ACH setup and enrollment are inefficient, outdated, and tedious.

While ACH payments have steadily grown, with 2023 seeing a 4.8% increase in payment volume, billers can further increase its usage for autopay by addressing the shortcomings ACH has. Open Banking directly tackles many of the pain points associated with ACH and allows billers and customers a streamlined and easy-to-use autopay experience. With Open Banking, billers can provide a simplified UX, remove manual input, and make autopay onboarding easier, all of which help improve and safeguard cash flow. 

Maximize Revenue with Open Banking ACH Autopay

By leveraging a robust Open Banking platform, billers can improve ACH autopay to maximize revenue in various ways:

  • Open Banking directly addresses concerns with ACH fraud with strong Multi-Factor Authentication (MFA). In addition, removing manual input means that there’s no sensitive information gets stored or exposed at any time. Mitigating fraud means less time and overhead costs spent reacting to data breaches or fraudulent payments. 
  • Removing the friction associated with ACH improves customer retention and avoids pitfalls that lead to churn and lost revenue. In fact, 43% of consumers are likely to switch businesses if their current bill payment process has friction. Leveraging Open Banking can significantly reduce the friction and hassle of setting up ACH autopay to satisfy customers with an easy process. 
  • Open Banking connectivity also gives billers enhanced data insights into their customers. With consumer-permissioned bank data, billers can craft better loyalty programs and utilize data to improve customer satisfaction, further aiding in retention and preventing loss of revenue. 

It’s evident that ACH autopay powered by Open Banking can help billers strengthen cash flow and maximize their revenue either directly or indirectly. By bringing ACH payments into the modern age, billers can implement cost-effective recurring payments that prevent costly mistakes due to friction and gain valuable financial insight from their customers to keep them satisfied with their current platform. 

How Billers Can Implement ACH Autopay to Safeguard Cash Flow

As noted above, Open Banking ACH autopay helps billers maximize revenue. But how can billers actually utilize it to its fullest potential? Certain billers offer ACH as their only payment method, which can make it difficult to justify why optimizing ACH is necessary when there aren’t other payment options for their customers to choose from. 

There are also billers that offer different payment methods to appease their customer base with varying choices but don’t know how to foster ACH autopay adoption. Here are ways billers can implement and encourage streamlined ACH autopay to their customers.

Improving Cashflow for Billers Offering ACH Only 

Billers that provide loans such as mortgages, auto loans, or personal loans often accept ACH as their only payment method. ACH autopay for industries that exclusively rely on it often don’t make enough effort to change their current outdated ACH payment system. This is because there’s typically no need to when no competition with other payment methods exists.

However, failing to modernize ACH autopay processes can negatively impact cash flow by eating into the monthly earnings from your customers. How? A friction-laden ACH process is the staging ground for declines and payment returns due to errors with manual input. Friction also acts as a barrier for conversion since no one wants to deal with the hassle of looking up out-of-the-way information like account numbers, resulting in less autopay enrollment. Manually typing account numbers, routing numbers, and manually submitting identity or account verification information not only takes time but can be rife with issues that ultimately cost billers money. 

When considering the fact that failed payments cost the world economy $11.85 billion a year, it’s apparent that taking enhanced measures to address this globally ubiquitous issue is necessary to retain more revenue, bolster cash flow, and prevent further unnecessary losses that are easily preventable with Open Banking which automates the entire onboarding process and verifies account ownership in real-time. Nothing gets done manually. For example, all customers need to connect to their bank accounts via Open Banking API is to sign in with their existing bank credentials. Set up is easy with a streamlined UX that can get customers ready to sign up and make recurring payments without digging for account numbers or other out-of-the-way information. 

Improving Cash Flow for Billers Offering Multiple Payment Options

Billers in telecommunications, insurance, subscription, property management, and more often have multiple payment options for customers to choose from when it comes to setting up autopay. This is mainly done to provide a measure of convenience and flexibility for the customers regarding how they want to pay. 

Despite ACH being cheaper than cards, most consumers prefer to use a card when presented with the option precisely because it’s easier to locate and use as a payment method compared to ACH, which requires you to locate account and routing numbers. Card payments are notorious for high processing fees, and most billers are already aware that interchange rates negatively impact how much profit they can take back at the end of each payment cycle. ACH is the preferred alternative, but getting consumers to choose ACH for their autopay payment method can be challenging. 

Alongside automating onboarding and removing manual input, it’s also important to encourage and incentivize ACH as a premiere choice for setting up autopay. It’s stated that roughly 41% of consumers need some sort of incentive to pick Pay By Bank options like ACH autopay, likely due to consumer knowledge gaps and prior negative experiences with ACH. However, by offering rewards points and discounts or eliminating additional administrative fees, consumers will take the chance to utilize ACH autopay. This, in turn, improves cash flow through reduced processing fees, allowing billers to retain more of their profits at the end of a transaction. 

Implement Modernized ACH Today

If you’re still on the fence about the power of Open Banking and a modernized ACH for autopay, consider this fact. Did you know that 23% of millennials have stated that they would pay bills with the least amount of friction first before others? In other words, billers with an optimized UX and frictionless payments are often prioritized to receive consistent payments over others that still use outdated processes. With this in mind, having an easy and streamlined payments experience is essential. Trustly Connect allows billers to implement cost-effective and optimized ACH autopay solutions easily. 

Trustly provides billers with the Open Banking platform that turns ACH into the powerhouse payments alternative its meant to be and helps encourage its usage for autopay. Cut out high interchange fees, reduce spending on overhead costs to repair declined, fraudulent, or returned transactions, and retain more of your revenue. Request a free demo today

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