Adding ACH as a payment option complicates the process, particularly with dunning management and auto-cancellation. This, in a sense is a liability to CheddarGetter (“CG”) in increased complexity of the system and an increased support burden. To the merchant, the increased complexity translates to a higher cost.
For example, with credit cards, CG immediately knows when a customer’s payment has been declined. CG communicates with the customer automatically on the merchant’s behalf to drive the process to correct the error. The error can be corrected quickly by the customer and again, CG knows immediately that it is either corrected or not. If the error is not corrected during this process, the customer’s subscription is canceled. This is all done automatically and without need for the merchant to enter into the process. You get paid faster and with decreased labor costs.
This process would be quite different in the case of ACH. It can take several days to learn if an ACH transaction was successful. In order to know whether or not a transaction was successful, CG would have to periodically ask the processor if recent transactions were successful. Typically a “successful” result is learned within a couple of days but a declined payment can take longer to “settle” in declined status. Then the dunning management would start. The customer then submits another payment attempt to correct the error. Again, several days pass before CG knows if it resulted in success. You get paid more slowly and potentially with increased labor cost.
Long story short, CG was designed to reduce the labor involved in managing a billing process for large numbers of customers. The sweet spot is high volume, relatively low dollar transactions. ACH only starts to become compelling when the environment is right. For example, low number of customers with high dollar transactions.
Take the pain out of your recurring billing system.