ACH Debit #2

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matin opened this Issue Aug 17, 2012 · 145 comments

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matin commented Aug 17, 2012

Balanced only allows for pulling money in from credit cards. ACH debits enable the following use cases:

  • merchant initiated refund to a buyer after the merchant has already received their money
  • debiting a merchant in the case of a chargeback by a buyer
  • large transactions that can't support the variable fee associated to credit card payments

UPDATE

ACH Debits are now supported, visit https://docs.balancedpayments.com/current/?language=bash#debiting-bank-accounts for more information

Email us at support@balancedpayments.com to get in the beta!

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matin Aug 17, 2012

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See also #3

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matin commented Aug 17, 2012

See also #3

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chadwhitacre Aug 17, 2012

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+1

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chadwhitacre commented Aug 17, 2012

+1

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chadwhitacre Aug 21, 2012

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Am I wrong in thinking that this would be something along the lines of 25¢ pay-in transactions? That would be huge. Credit card fees are painful.

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chadwhitacre commented Aug 21, 2012

Am I wrong in thinking that this would be something along the lines of 25¢ pay-in transactions? That would be huge. Credit card fees are painful.

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matin Aug 21, 2012

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@whit537 haven't finalized the pricing yet, but 25¢ to 50¢ sounds like the right ballpark

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matin commented Aug 21, 2012

@whit537 haven't finalized the pricing yet, but 25¢ to 50¢ sounds like the right ballpark

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matin Aug 22, 2012

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from @femgineer

What's the current pattern for refunds? As in, how quickly would a buyer request a refund? What is the volume of refunds being processed on e-commerce sites. I ask because everyone is talking about abuse and when is the appropriate time to issue a refund.

Can you clarify what you mean by "refund"? Are you talking about refunding a card transaction or a seller initiated refund, which would require debiting the seller's bank account.

When are you anticipating this going live?

In September. ACH debits is something we have to do, but we need to prioritize against other highly requested changes that are blocking some customers from going live altogether. The more people that comment here and comment on #3, the faster we can move.

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matin commented Aug 22, 2012

from @femgineer

What's the current pattern for refunds? As in, how quickly would a buyer request a refund? What is the volume of refunds being processed on e-commerce sites. I ask because everyone is talking about abuse and when is the appropriate time to issue a refund.

Can you clarify what you mean by "refund"? Are you talking about refunding a card transaction or a seller initiated refund, which would require debiting the seller's bank account.

When are you anticipating this going live?

In September. ACH debits is something we have to do, but we need to prioritize against other highly requested changes that are blocking some customers from going live altogether. The more people that comment here and comment on #3, the faster we can move.

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jjhurlock Aug 22, 2012

+1 for Pessimistic. ACH debits are a requested priority and a September launch would be great. In my situation most buyers prefer to be debited via ACH because the large transactions can't fit on their card.

+1 for Pessimistic. ACH debits are a requested priority and a September launch would be great. In my situation most buyers prefer to be debited via ACH because the large transactions can't fit on their card.

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jkwade Aug 23, 2012

@whit537 Unlike @jjhurlock's use case, you'd want to debit a buyer's bank account for a relatively small amount (~$10):

  1. Is this purely to avoid the processing fees associated with credit cards?
  2. Are your buyer tolerant of a pessimistic ACH debit work flow?

jkwade commented Aug 23, 2012

@whit537 Unlike @jjhurlock's use case, you'd want to debit a buyer's bank account for a relatively small amount (~$10):

  1. Is this purely to avoid the processing fees associated with credit cards?
  2. Are your buyer tolerant of a pessimistic ACH debit work flow?
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dsog Aug 23, 2012

+1 I love where this is going :).

dsog commented Aug 23, 2012

+1 I love where this is going :).

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femgineer Aug 23, 2012

@matin So I get the concept of a large transaction not fitting on the card, but would a seller also have the option to use ACH in the event they do not want to pay the large fee associated with the large transaction? I'm guessing that is something that BizeeBee would to have to offer right?

@matin So I get the concept of a large transaction not fitting on the card, but would a seller also have the option to use ACH in the event they do not want to pay the large fee associated with the large transaction? I'm guessing that is something that BizeeBee would to have to offer right?

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femgineer Aug 23, 2012

@matin Also I meant a seller initiated refund, because those are the only types of refunds we would be dealing with on BizeeBee.

@matin Also I meant a seller initiated refund, because those are the only types of refunds we would be dealing with on BizeeBee.

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@jkwade

Is this purely to avoid the processing fees associated with credit cards?

Yes.

Are your buyer tolerant of a pessimistic ACH debit work flow?

Dunno, need to think about that more. The pessimistic flow means ~four days before money is available to gift back out, right?

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chadwhitacre commented Aug 23, 2012

@jkwade

Is this purely to avoid the processing fees associated with credit cards?

Yes.

Are your buyer tolerant of a pessimistic ACH debit work flow?

Dunno, need to think about that more. The pessimistic flow means ~four days before money is available to gift back out, right?

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matin Aug 23, 2012

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@femgineer you could use it at any time

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matin commented Aug 23, 2012

@femgineer you could use it at any time

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Dunno, need to think about that more. The pessimistic flow means ~four days before money is available to gift back out, right?

@whit537 not certain. I contacted a few banks yesterday to see the level of service they could provide. Not all banks are equal. I'll post an update here when I have more info on getting the time down, which is a huge component of the experience.

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matin commented Aug 23, 2012

Dunno, need to think about that more. The pessimistic flow means ~four days before money is available to gift back out, right?

@whit537 not certain. I contacted a few banks yesterday to see the level of service they could provide. Not all banks are equal. I'll post an update here when I have more info on getting the time down, which is a huge component of the experience.

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spenczar Aug 23, 2012

Holy moly, this would be extremely valuable to us at ZeroCater - very excited to follow this.

Holy moly, this would be extremely valuable to us at ZeroCater - very excited to follow this.

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timnguyen Aug 25, 2012

@whit357 and for people looking to ACH strictly to avoid processing fees.

Anecdotally, we've seen lots of people be fairly hesitant about having to provide bank info. Many actually prefer check even with the longer delay and greater inconvenience required to actually cash the check. Additionally there have been studies and speculation positing that credit cards make consumers more likely to spend.
http://www.psychologytoday.com/blog/ulterior-motives/201001/spending-and-credit-cards
http://www.npr.org/templates/story/story.php?storyId=92178034
http://spectrum.mit.edu/articles/normal/the-psychology-of-spending/

I'm not saying ACH in is bad and I agree that card fees suck, but the above evidence makes me skeptical that ACH payment would be a very good solution for low value transactions, whimsy purchases, or marketplaces with short-term customer-marketplace relationships.

@whit357 and for people looking to ACH strictly to avoid processing fees.

Anecdotally, we've seen lots of people be fairly hesitant about having to provide bank info. Many actually prefer check even with the longer delay and greater inconvenience required to actually cash the check. Additionally there have been studies and speculation positing that credit cards make consumers more likely to spend.
http://www.psychologytoday.com/blog/ulterior-motives/201001/spending-and-credit-cards
http://www.npr.org/templates/story/story.php?storyId=92178034
http://spectrum.mit.edu/articles/normal/the-psychology-of-spending/

I'm not saying ACH in is bad and I agree that card fees suck, but the above evidence makes me skeptical that ACH payment would be a very good solution for low value transactions, whimsy purchases, or marketplaces with short-term customer-marketplace relationships.

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jjhurlock Aug 25, 2012

@timnguyen Regarding ACH payments for large transactions that can't fit on a single card. Could a user who is hesitant to provide their banking info have the ability to pay simultaneously with two cards? I know Apple.com allows this feature at checkout.

@timnguyen Regarding ACH payments for large transactions that can't fit on a single card. Could a user who is hesitant to provide their banking info have the ability to pay simultaneously with two cards? I know Apple.com allows this feature at checkout.

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spenczar Aug 25, 2012

@jjhurlock I don't know about @timnguyen, but in my experience at least, payers don't always have two cards. The usual answer is to split the transaction into several charges over several days. ACH debit would be welcome to replace that awkward practice.

@jjhurlock I don't know about @timnguyen, but in my experience at least, payers don't always have two cards. The usual answer is to split the transaction into several charges over several days. ACH debit would be welcome to replace that awkward practice.

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timnguyen Aug 25, 2012

@spenczar I absolutely agree that ACH debits is hands down the better solution for large transactions. That's where both card limits and card fees become very very significant issues. All I'm saying is that for low value general e-commerce transactions ACH for payment is lacking/needs lots of work. I forgot to mention earlier though, I think the major use case for splitting across cards is with prepaid/giftcards.

@jjhurlock Currently marketplaces can already create multiple debits with different payments instruments for the same user through balanced. The caveat is that I'm not sure what is the best way to arrange the UX for the form on the marketplace's end.

@spenczar I absolutely agree that ACH debits is hands down the better solution for large transactions. That's where both card limits and card fees become very very significant issues. All I'm saying is that for low value general e-commerce transactions ACH for payment is lacking/needs lots of work. I forgot to mention earlier though, I think the major use case for splitting across cards is with prepaid/giftcards.

@jjhurlock Currently marketplaces can already create multiple debits with different payments instruments for the same user through balanced. The caveat is that I'm not sure what is the best way to arrange the UX for the form on the marketplace's end.

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KRecht Aug 27, 2012

We vote for both ACH for customer transactions and for merchant refunds @venuebook.

KRecht commented Aug 27, 2012

We vote for both ACH for customer transactions and for merchant refunds @venuebook.

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matin Aug 29, 2012

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@spenczar @khussein @KRecht @jjhurlock @whit537

What do you expect the average size of ACH debits for you to be?

You can send this number to me directly: support@balancedpayments.com

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matin commented Aug 29, 2012

@spenczar @khussein @KRecht @jjhurlock @whit537

What do you expect the average size of ACH debits for you to be?

You can send this number to me directly: support@balancedpayments.com

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franklangston Aug 30, 2012

Big upvote here! Crucial for handling refunds and chargebacks because merchants want their money quickly, but that means they have to get it back in for those scenarios. Receiving buyer money via ACH is also a positive.

Big upvote here! Crucial for handling refunds and chargebacks because merchants want their money quickly, but that means they have to get it back in for those scenarios. Receiving buyer money via ACH is also a positive.

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rmanisha Sep 13, 2012

What would be the limit on ACH Debits?

What would be the limit on ACH Debits?

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@rmanisha there won't be one in the API, but the customer's bank may impose one for that particular customer.

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matin commented Sep 13, 2012

@rmanisha there won't be one in the API, but the customer's bank may impose one for that particular customer.

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matin commented Sep 13, 2012

matin added a commit that referenced this issue Sep 14, 2012

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charliepinto Sep 14, 2012

I'm pretty late to this conversion. I apologize if my below questions are already answered:

ACH Credits: Do you expect to impose a limit on the number of transactions per day? Is there a limit on any particular transaction size? Do you expect to impose reserves?

ACH Credit Batching: How often and when can we batch transactions to our merchants? Will you follow strict times when you initiate instructions?

ACH Return Error/Corrections: How will you handle errors and corrections? Will you provide a smart error and return responses (e.g., frozen account, account closed, insufficient funds, invalid account number, invalid routing number). In our experience, the error responses are very helpful for risk management. Also, if a credit fails, will you automatically retry during the next ACH cycle? Some users input incorrect bank information (invalid account/routing number) and we would like to know so we can tell the user why they credit failed.

I'm pretty late to this conversion. I apologize if my below questions are already answered:

ACH Credits: Do you expect to impose a limit on the number of transactions per day? Is there a limit on any particular transaction size? Do you expect to impose reserves?

ACH Credit Batching: How often and when can we batch transactions to our merchants? Will you follow strict times when you initiate instructions?

ACH Return Error/Corrections: How will you handle errors and corrections? Will you provide a smart error and return responses (e.g., frozen account, account closed, insufficient funds, invalid account number, invalid routing number). In our experience, the error responses are very helpful for risk management. Also, if a credit fails, will you automatically retry during the next ACH cycle? Some users input incorrect bank information (invalid account/routing number) and we would like to know so we can tell the user why they credit failed.

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@charliepinto not late at all.

ACH Credits

Do you expect to impose a limit on the number of transactions per day?

No.

Is there a limit on any particular transaction size?

No.

Do you expect to impose reserves?

Can you clarify? Do you mean support a credit reversal?

ACH Credit Batching

How often and when can we batch transactions to our merchants?

You hit the API per request. The API make sure to batch the items before the cutoff times to get the funds out as quickly as possible. This saves you from having to worry about breaking up the requests or pay a fee per batch.

Will you follow strict times when you initiate instructions?

Our current (internal) cut-off is 4:30pm PT for next business day. In reality, the cut-off for the API is earlier since the requests have to get batched and pushed out. I created #81 to answer this question in more detail.

ACH Return Error/Corrections

How will you handle errors and corrections?

It would fall under rejected. There's only three states defined right now: pending, cleared, and rejected.

Will you provide a smart error and return responses (e.g., frozen account, account closed, insufficient funds, invalid account number, invalid routing number). In our experience, the error responses are very helpful for risk management. Some users input incorrect bank information (invalid account/routing number) and we would like to know so we can tell the user why they credit failed.

  • Incorrect routing numbers can be determined during the request. I already added it to the list of request errors in #80
  • I added #82 to define how rejection reasons should be returned

Also, if a credit fails, will you automatically retry during the next ACH cycle?

What would you like to see? The current spec tells you the credit was rejected and let's you try again.

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matin commented Sep 14, 2012

@charliepinto not late at all.

ACH Credits

Do you expect to impose a limit on the number of transactions per day?

No.

Is there a limit on any particular transaction size?

No.

Do you expect to impose reserves?

Can you clarify? Do you mean support a credit reversal?

ACH Credit Batching

How often and when can we batch transactions to our merchants?

You hit the API per request. The API make sure to batch the items before the cutoff times to get the funds out as quickly as possible. This saves you from having to worry about breaking up the requests or pay a fee per batch.

Will you follow strict times when you initiate instructions?

Our current (internal) cut-off is 4:30pm PT for next business day. In reality, the cut-off for the API is earlier since the requests have to get batched and pushed out. I created #81 to answer this question in more detail.

ACH Return Error/Corrections

How will you handle errors and corrections?

It would fall under rejected. There's only three states defined right now: pending, cleared, and rejected.

Will you provide a smart error and return responses (e.g., frozen account, account closed, insufficient funds, invalid account number, invalid routing number). In our experience, the error responses are very helpful for risk management. Some users input incorrect bank information (invalid account/routing number) and we would like to know so we can tell the user why they credit failed.

  • Incorrect routing numbers can be determined during the request. I already added it to the list of request errors in #80
  • I added #82 to define how rejection reasons should be returned

Also, if a credit fails, will you automatically retry during the next ACH cycle?

What would you like to see? The current spec tells you the credit was rejected and let's you try again.

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Your ACH product will work with our bank, correct?

Yes. Here's an example:

  1. debit your bank account $10k
  2. use the funds to issue ten $1000 credits to different people
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matin commented Sep 14, 2012

Your ACH product will work with our bank, correct?

Yes. Here's an example:

  1. debit your bank account $10k
  2. use the funds to issue ten $1000 credits to different people

@matin matin referenced this issue Sep 17, 2012

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Payouts via check #69

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matin Sep 19, 2012

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Begun work on implementing the spec: https://github.com/balanced/balanced-api/tree/ach

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matin commented Sep 19, 2012

Begun work on implementing the spec: https://github.com/balanced/balanced-api/tree/ach

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benblair Sep 25, 2012

+1 will definitely use once production-ready

+1 will definitely use once production-ready

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matin Oct 1, 2012

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I apologize for the delay, but releasing the client libraries and taking the ACH API live has been pushed back by two weeks.

In the meantime, the ACH API is available for tests. We'd love feedback on the interface.

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matin commented Oct 1, 2012

I apologize for the delay, but releasing the client libraries and taking the ACH API live has been pushed back by two weeks.

In the meantime, the ACH API is available for tests. We'd love feedback on the interface.

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rrhyne Nov 6, 2012

Nearly any b2b marketplace would require ACH payments from buyers. This is an area Balanced could get a big win over Stripe, BrainTree and the like.

rrhyne commented Nov 6, 2012

Nearly any b2b marketplace would require ACH payments from buyers. This is an area Balanced could get a big win over Stripe, BrainTree and the like.

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matin Nov 6, 2012

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I want to give an update on why there's been such a long delay. We evaluated the potential and the costs of ACH debits and decided to revisit later.

Here's a quick explanation as to why, for the sake of transparency:

revenue = number of marketplaces x total volume ÷ average transaction size x transaction fee

The cost consists of the requirements to meet compliance and the fraud risk. ACH has a dispute process similar to card transactions. Debits from business accounts have a dispute window of two business days, but debits from a personal bank account have a dispute window of 60 days.

There's no surprises about any of the information above. What changed was that the average transaction size ended up being higher than expected (by nearly an order of magnitude) and the risk is estimated to be higher than originally expected. At the moment, it doesn't make good business sense for us to move forward with ACH debits, which really sucks.

We took all the work in designing an easy to use ACH API, and we're merging it directly into our production API for ACH credits. This means that a marketplace will be able to use us purely for paying vendors. The following will be the required fields, which you'll notice is different than the process to pay a merchant when processing a card transaction.

  • amount of the credit
  • account holder's name
  • account number
  • routing number
  • account type

The next step will be to provide marketplaces the ability to reverse a credit directly through the dashboard—something that currently requires contacting us.

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matin commented Nov 6, 2012

I want to give an update on why there's been such a long delay. We evaluated the potential and the costs of ACH debits and decided to revisit later.

Here's a quick explanation as to why, for the sake of transparency:

revenue = number of marketplaces x total volume ÷ average transaction size x transaction fee

The cost consists of the requirements to meet compliance and the fraud risk. ACH has a dispute process similar to card transactions. Debits from business accounts have a dispute window of two business days, but debits from a personal bank account have a dispute window of 60 days.

There's no surprises about any of the information above. What changed was that the average transaction size ended up being higher than expected (by nearly an order of magnitude) and the risk is estimated to be higher than originally expected. At the moment, it doesn't make good business sense for us to move forward with ACH debits, which really sucks.

We took all the work in designing an easy to use ACH API, and we're merging it directly into our production API for ACH credits. This means that a marketplace will be able to use us purely for paying vendors. The following will be the required fields, which you'll notice is different than the process to pay a merchant when processing a card transaction.

  • amount of the credit
  • account holder's name
  • account number
  • routing number
  • account type

The next step will be to provide marketplaces the ability to reverse a credit directly through the dashboard—something that currently requires contacting us.

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rrhyne Nov 6, 2012

Thanks for the update @matin.

rrhyne commented Nov 6, 2012

Thanks for the update @matin.

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jrus Jun 17, 2013

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For discussion of potentially doing ACH debits without bank account verifications, see #281

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jrus commented Jun 17, 2013

For discussion of potentially doing ACH debits without bank account verifications, see #281

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todgru Jun 27, 2013

+1

todgru commented Jun 27, 2013

+1

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Bula Jun 28, 2013

As you mentioned, you pivoted away from an ACH Debit solution and focusing on primarily International Transactions. Please post an update if you pivot back to an integrated ACH Debit solution.

Bula commented Jun 28, 2013

As you mentioned, you pivoted away from an ACH Debit solution and focusing on primarily International Transactions. Please post an update if you pivot back to an integrated ACH Debit solution.

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lay2000lbs Jun 28, 2013

This has been put on hold? @Bula was there an official statement about it?

ACH debiting is definitely the number 1 feature we have been excited about and why we choose Balanced in the first place.

This has been put on hold? @Bula was there an official statement about it?

ACH debiting is definitely the number 1 feature we have been excited about and why we choose Balanced in the first place.

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Bula Jun 28, 2013

@lay2000lbs Its our #1 feature too. no official statement but better call BP directly as we did. We really hope they solve ACH Debit but they mentioned that their focus has shifted primarily to International Trx (currency spreads). We would have certainly used BP for everything but this has caused us to step back. ACH debit is critical. again, love their original scope, hope they come back. Hopefully @matin can clarify.

Bula commented Jun 28, 2013

@lay2000lbs Its our #1 feature too. no official statement but better call BP directly as we did. We really hope they solve ACH Debit but they mentioned that their focus has shifted primarily to International Trx (currency spreads). We would have certainly used BP for everything but this has caused us to step back. ACH debit is critical. again, love their original scope, hope they come back. Hopefully @matin can clarify.

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matin Jun 28, 2013

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@lay2000lbs @Bula you can do ACH debits today. Shoot us an email at support@balancedpayments.com, and we'll enable it for you. The main thing for ACH debits we're focusing on is letting you define how the transaction shows up on the bank statement. It currently shows up as "BALANCED".

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matin commented Jun 28, 2013

@lay2000lbs @Bula you can do ACH debits today. Shoot us an email at support@balancedpayments.com, and we'll enable it for you. The main thing for ACH debits we're focusing on is letting you define how the transaction shows up on the bank statement. It currently shows up as "BALANCED".

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jtoth55 Jun 28, 2013

You can do ACH debits, yes, however they're not viable with the current pricing.

jtoth55 commented Jun 28, 2013

You can do ACH debits, yes, however they're not viable with the current pricing.

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matin Jun 28, 2013

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@jtoth55 it's currently 1% + 30¢. Does it become more viable for you if there's a $20 cap on that fee?

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matin commented Jun 28, 2013

@jtoth55 it's currently 1% + 30¢. Does it become more viable for you if there's a $20 cap on that fee?

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jtoth55 Jun 28, 2013

Unfortunately no, my scenario is tenants making rent payments to landlords. An average rent payment is ~$1,000, so we're talking a $10.30 fee per rent payment.

Dwolla offers 25 cent ach transfers (albeit with a much poorer UX). Balanced's white label api makes for a much better UX, so I would use it in a heartbeat if it was competitive in price, even if the fee was 2-4x as much (50 cents - $1).

Many bank accounts offer external transfers for free (Chase QuickPay) or for a small fee ($3 for Bank of America), so no one will use my site's rent payment services with such a large fee.

jtoth55 commented Jun 28, 2013

Unfortunately no, my scenario is tenants making rent payments to landlords. An average rent payment is ~$1,000, so we're talking a $10.30 fee per rent payment.

Dwolla offers 25 cent ach transfers (albeit with a much poorer UX). Balanced's white label api makes for a much better UX, so I would use it in a heartbeat if it was competitive in price, even if the fee was 2-4x as much (50 cents - $1).

Many bank accounts offer external transfers for free (Chase QuickPay) or for a small fee ($3 for Bank of America), so no one will use my site's rent payment services with such a large fee.

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lay2000lbs Jun 28, 2013

@matin the cap was something I have been hoping you would introduce. A $20 cap is high to me but a $5 would be very reasonable and I would even pay at a $10 cap, under the assumption that the goal would be to take that fee down. We are dealing in donation processing.

@matin the cap was something I have been hoping you would introduce. A $20 cap is high to me but a $5 would be very reasonable and I would even pay at a $10 cap, under the assumption that the goal would be to take that fee down. We are dealing in donation processing.

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gbelote Jun 28, 2013

@matin a cap would be a very welcome addition for us since we've had a few $25k debits and currently run larger payments outside of BP due to cost.

gbelote commented Jun 28, 2013

@matin a cap would be a very welcome addition for us since we've had a few $25k debits and currently run larger payments outside of BP due to cost.

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benblair Jun 28, 2013

@matin FWIW, a $20 cap on ACH debit would definitely get us to switch our transactions to balanced. We're mostly in the $20-50k range per transaction.

@matin FWIW, a $20 cap on ACH debit would definitely get us to switch our transactions to balanced. We're mostly in the $20-50k range per transaction.

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mahmoudimus Jun 29, 2013

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again, just to re-iterate what @matin said, email support@balancedpayments.com get in the beta for ACH debits.

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mahmoudimus commented Jun 29, 2013

again, just to re-iterate what @matin said, email support@balancedpayments.com get in the beta for ACH debits.

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bbry Jul 1, 2013

I have done a great deal of research into companies who only provide ACH transactions via their own API's. I have to reinstate that charging 1% is crazy high. On average I was quoted $00.25 that is twenty five cents total, not $00.30 + 1%, just $00.25. $00.25 is the top price and it was lowered with increased usage. Balanced might have a good API but it is not worth using it when comparing the costs involved to other companies offering the same services.

bbry commented Jul 1, 2013

I have done a great deal of research into companies who only provide ACH transactions via their own API's. I have to reinstate that charging 1% is crazy high. On average I was quoted $00.25 that is twenty five cents total, not $00.30 + 1%, just $00.25. $00.25 is the top price and it was lowered with increased usage. Balanced might have a good API but it is not worth using it when comparing the costs involved to other companies offering the same services.

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erikcw Aug 8, 2013

I agree. 1% is very high based on my research.

I understand that you guys have to eat, but it just doesn't seem competitive. I've been getting quotes for $0.25 per transaction. Of course, if the business doesn't do any significant volume, then the nice Balanced APIs/speed of integration might make it a worthwhile tradeoff. But your clients are just going to migrate to other solutions as their processing volume climbs. Balanced's competitors' APIs aren't that obtuse!

erikcw commented Aug 8, 2013

I agree. 1% is very high based on my research.

I understand that you guys have to eat, but it just doesn't seem competitive. I've been getting quotes for $0.25 per transaction. Of course, if the business doesn't do any significant volume, then the nice Balanced APIs/speed of integration might make it a worthwhile tradeoff. But your clients are just going to migrate to other solutions as their processing volume climbs. Balanced's competitors' APIs aren't that obtuse!

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whather Aug 8, 2013

I'm fine with the 1% fee, as our margins are over 20%.

However, we can't use it because of the account verification piece (where
the buyer has to verify the 3 micro payments balanced sends the account
before any transfers are allowed). Most of our buyers don't have direct
access to the business bank account they use, and therefore can't verify. I
wish there was a way around this.

On Thu, Aug 8, 2013 at 10:43 AM, erikcw notifications@github.com wrote:

I agree. 1% is very high based on my research.

I understand that you guys have to eat, but it just doesn't seem
competitive. I've been getting quotes for $0.25 per transaction. Of course,
if the business doesn't do any significant volume, then the nice Balanced
APIs/speed of integration might make it a worthwhile tradeoff. But your
clients are just going to migrate to other solutions as their processing
volume climbs. Balanced's competitors' APIs aren't that obtuse!


Reply to this email directly or view it on GitHubhttps://github.com/balanced/balanced-api/issues/2#issuecomment-22340943
.

whather commented Aug 8, 2013

I'm fine with the 1% fee, as our margins are over 20%.

However, we can't use it because of the account verification piece (where
the buyer has to verify the 3 micro payments balanced sends the account
before any transfers are allowed). Most of our buyers don't have direct
access to the business bank account they use, and therefore can't verify. I
wish there was a way around this.

On Thu, Aug 8, 2013 at 10:43 AM, erikcw notifications@github.com wrote:

I agree. 1% is very high based on my research.

I understand that you guys have to eat, but it just doesn't seem
competitive. I've been getting quotes for $0.25 per transaction. Of course,
if the business doesn't do any significant volume, then the nice Balanced
APIs/speed of integration might make it a worthwhile tradeoff. But your
clients are just going to migrate to other solutions as their processing
volume climbs. Balanced's competitors' APIs aren't that obtuse!


Reply to this email directly or view it on GitHubhttps://github.com/balanced/balanced-api/issues/2#issuecomment-22340943
.

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bbry Aug 9, 2013

There is never a reason to leave money on the table. A $500 ACH transaction equals a $5 transaction fee. So for example say you have 5,000 customers paying $500 or more(since there is a $5 cap), that would be a balanced payments fee of $25,000 fee VS a fee of $1,250 with other ACH processors who charge only .25 a quarter per transaction. That is a huge difference of over $23,750 you would loose.

bbry commented Aug 9, 2013

There is never a reason to leave money on the table. A $500 ACH transaction equals a $5 transaction fee. So for example say you have 5,000 customers paying $500 or more(since there is a $5 cap), that would be a balanced payments fee of $25,000 fee VS a fee of $1,250 with other ACH processors who charge only .25 a quarter per transaction. That is a huge difference of over $23,750 you would loose.

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jkwade Aug 10, 2013

@whather @erikcw

Please note we've updated our pricing. ACH Debits now cost 1% + 30¢ with a $5 cap.
image

jkwade commented Aug 10, 2013

@whather @erikcw

Please note we've updated our pricing. ACH Debits now cost 1% + 30¢ with a $5 cap.
image

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bbry Aug 10, 2013

Yaha @jkwade I know it is still a rip off compared to other ACH providers as you will see in my example above.

bbry commented Aug 10, 2013

Yaha @jkwade I know it is still a rip off compared to other ACH providers as you will see in my example above.

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matin Aug 10, 2013

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@bbry The original goal was to provide something that is price competitive by starting at $1 per transaction. We realized that the business case didn't make sense in compared to other priorities like international, foreign currency support, etc. More info in my previous comment: #2 (comment)

We revisited offering ACH debits when several customers requested that we reconsider if they were willing to pay more. After enough customers encouraged us, we moved forward. We've had the goal to continually reduce the pricing. Adding a $5 cap was the first step. The plan is to reduce the cap in increments as it makes sense.

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matin commented Aug 10, 2013

@bbry The original goal was to provide something that is price competitive by starting at $1 per transaction. We realized that the business case didn't make sense in compared to other priorities like international, foreign currency support, etc. More info in my previous comment: #2 (comment)

We revisited offering ACH debits when several customers requested that we reconsider if they were willing to pay more. After enough customers encouraged us, we moved forward. We've had the goal to continually reduce the pricing. Adding a $5 cap was the first step. The plan is to reduce the cap in increments as it makes sense.

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lay2000lbs Aug 10, 2013

I just want to jump in to state that I and my business are very happy with the ACH pricing schedule. There is an obvious selection bias to only get negative comments on a post like this so I want to say thanks for making this happen and this is a huge value add for us.

For us, we're not trying to build the cheapest product, we're building the best product and often times that means you need to pay a higher monetary costs to build a system that has other major advantages. If we were looking for cheap we would have opened our own merchant account and been processing our own payments. Likewise with ACH, they are plenty of cheap providers.

A lot of this boils down to your business model and market. If you're using ACH for traditional use cases and going against existing providers your are already in a losing margins battle. But if you are using ACH in a novel manner than the $5 fee may actually be incredibly competitive.

I just want to jump in to state that I and my business are very happy with the ACH pricing schedule. There is an obvious selection bias to only get negative comments on a post like this so I want to say thanks for making this happen and this is a huge value add for us.

For us, we're not trying to build the cheapest product, we're building the best product and often times that means you need to pay a higher monetary costs to build a system that has other major advantages. If we were looking for cheap we would have opened our own merchant account and been processing our own payments. Likewise with ACH, they are plenty of cheap providers.

A lot of this boils down to your business model and market. If you're using ACH for traditional use cases and going against existing providers your are already in a losing margins battle. But if you are using ACH in a novel manner than the $5 fee may actually be incredibly competitive.

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bbry Aug 10, 2013

That is very encouraging to hear that you are working on lowering your pricing further. Keep up the good work.

bbry commented Aug 10, 2013

That is very encouraging to hear that you are working on lowering your pricing further. Keep up the good work.

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satiani Aug 20, 2013

Can you please update the documentation on balancedpayments.com?

https://docs.balancedpayments.com/current/api.html#debits says:

Currently, Balanced supports only card transactions (info on ACH debits) for debits. To debit an account, i.e. charge a card, you must create a new debit resource.

The "info on ACH debits" links to this github issue. Furthermore, this link https://docs.balancedpayments.com/current/api.html#bank-account-verifications says:

NOTE You'll only need to verify a bank account if you're planning to later debit that account, which is a functionality only available through our ACH Debits private beta. Email support@balancedpayments.com to request access.

As I understand things, ACH debits is out of beta.

satiani commented Aug 20, 2013

Can you please update the documentation on balancedpayments.com?

https://docs.balancedpayments.com/current/api.html#debits says:

Currently, Balanced supports only card transactions (info on ACH debits) for debits. To debit an account, i.e. charge a card, you must create a new debit resource.

The "info on ACH debits" links to this github issue. Furthermore, this link https://docs.balancedpayments.com/current/api.html#bank-account-verifications says:

NOTE You'll only need to verify a bank account if you're planning to later debit that account, which is a functionality only available through our ACH Debits private beta. Email support@balancedpayments.com to request access.

As I understand things, ACH debits is out of beta.

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matin Aug 21, 2013

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@satiani thanks for the catch.

ping @cieplak @remear ^^^

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matin commented Aug 21, 2013

@satiani thanks for the catch.

ping @cieplak @remear ^^^

@remear remear referenced this issue in balanced/balanced-docs Aug 22, 2013

Merged

ACH debits are no longer in beta #236

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remear Aug 22, 2013

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Thanks, @satiani. This should now be fixed.

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remear commented Aug 22, 2013

Thanks, @satiani. This should now be fixed.

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jondkinney Aug 31, 2013

Came here from https://www.balancedpayments.com/help#q127 seems like that q&a needs to be updated?

Came here from https://www.balancedpayments.com/help#q127 seems like that q&a needs to be updated?

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chadwhitacre Jan 8, 2014

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Why is this ticket still open? Balanced has offered ACH debits for months now, right?

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chadwhitacre commented Jan 8, 2014

Why is this ticket still open? Balanced has offered ACH debits for months now, right?

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steveklabnik Jan 8, 2014

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It'll get closed soon, don't worry.—
Sent from Mailbox for iPhone

On Tue, Jan 7, 2014 at 11:20 PM, Chad Whitacre notifications@github.com
wrote:

Why is this ticket still open? Balanced has offered ACH debits for months now, right?

Reply to this email directly or view it on GitHub:
#2 (comment)

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steveklabnik commented Jan 8, 2014

It'll get closed soon, don't worry.—
Sent from Mailbox for iPhone

On Tue, Jan 7, 2014 at 11:20 PM, Chad Whitacre notifications@github.com
wrote:

Why is this ticket still open? Balanced has offered ACH debits for months now, right?

Reply to this email directly or view it on GitHub:
#2 (comment)

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bbry Jan 15, 2014

I am still waiting for ACH debits to cost as much as other ACH processors at apx $.20 a debit or credit.

bbry commented Jan 15, 2014

I am still waiting for ACH debits to cost as much as other ACH processors at apx $.20 a debit or credit.

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jtoth55 Jan 15, 2014

Same here, my site is for landlords accepting rent payments from tenants, however rent payments are always going to hit the $5 fee limit, which isn't competitive with other services the tenant could use for sending the rent.

I love the Balanced API so I'm OK with the fees being a bit higher than other services like Dwolla (which has a terrible UX), but $5 is way too much. We're talking ACH here, not credit cards, so we would expect cents rather than dollars for the fee. Then I can add a little more to the fee for myself and have a viable business model for my site!

jtoth55 commented Jan 15, 2014

Same here, my site is for landlords accepting rent payments from tenants, however rent payments are always going to hit the $5 fee limit, which isn't competitive with other services the tenant could use for sending the rent.

I love the Balanced API so I'm OK with the fees being a bit higher than other services like Dwolla (which has a terrible UX), but $5 is way too much. We're talking ACH here, not credit cards, so we would expect cents rather than dollars for the fee. Then I can add a little more to the fee for myself and have a viable business model for my site!

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bbry Jan 15, 2014

@jtoth55 curious what the url to your landlord site it

also I agree @jtoth55 if dwolla can charge $.25 per a transaction then there is no reason that balanced can not follow, because no landlord is going to pay $5 when they currently pay zero when cashing a check. Or any other business that deals in high dollar amounts.

bbry commented Jan 15, 2014

@jtoth55 curious what the url to your landlord site it

also I agree @jtoth55 if dwolla can charge $.25 per a transaction then there is no reason that balanced can not follow, because no landlord is going to pay $5 when they currently pay zero when cashing a check. Or any other business that deals in high dollar amounts.

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robertdoneill Feb 12, 2014

@bbry just curious who you've found that charges $0.20 per ACH transaction.

@bbry just curious who you've found that charges $0.20 per ACH transaction.

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bbry Feb 12, 2014

@robertdoneill some ACH processors in no particular order are
forte.net
achworks.com
checkgateway.com
While some of them do have a monthly fee(apx $20), that is a lot creeper then paying $5 for every transaction if you are doing high ticket transactions like collecting rent.

bbry commented Feb 12, 2014

@robertdoneill some ACH processors in no particular order are
forte.net
achworks.com
checkgateway.com
While some of them do have a monthly fee(apx $20), that is a lot creeper then paying $5 for every transaction if you are doing high ticket transactions like collecting rent.

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robertdoneill Feb 12, 2014

@bbry thanks for the help! I totally agree. Especially since (in my case where there are just b2b transactions) the "risk" they are pricing for doesn't even apply.

Its really a shame, the service is really great otherwise.

@bbry thanks for the help! I totally agree. Especially since (in my case where there are just b2b transactions) the "risk" they are pricing for doesn't even apply.

Its really a shame, the service is really great otherwise.

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steveklabnik Mar 11, 2014

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We support ACH debits.

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steveklabnik commented Mar 11, 2014

We support ACH debits.

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