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Determine pricing for ACH debits #47

Closed
matin opened this Issue · 19 comments

8 participants

@matin
Owner

To complete #2, Balanced has to determine an appropriate price for ACH debits.

@matin
Owner

Current proposal is $1 fixed (no variable) for ACH debits.

ACH credits will remain 25¢.

@rmanisha

How about a percentage with a $1 cap? Could work better for smaller transactions.

@matin
Owner

@rmanisha Balanced pays a fixed fee regardless of the transaction size. There could be a business justification to implement such a loss leader, but this can be revisited

@matin
Owner

Finalizing on $1 for ACH debits.

@matin matin closed this
@jkwade

ACH rejection pricing discussed at #91.

@whit537

I'm late to this conversation, but the $1 fee puts this at $24 break-even with credit card pricing (2.9% + $0.30). Do I have that right? That's less compelling for my use case, which is for the most part $10 transactions.

@matin
Owner

You have it right, but you have a different use case from most of the people that emailed me. You will have lower transaction sized, but you should also have a larger number of transactions, which is where volume pricing (#57) comes in.

@quellhorst

Regarding the fees for ACH debits. In the use cases I run into 1% + $.30 could work unless it is higher dollar amounts i.e. > $500. Maybe you could do some type of cap or tier for the charge?

I'd like to mention https://www.dwolla.com/fees ... They charge $0 for payments under $10 and $.25 to receive > $10.

@chourobin

+1 for a cap on larger transactions

@ithielnor

A cap of $5 seems extremely high for my use case. My average debit is between $100-$250. Other ACH processor I've found would charge under $1.50 for these, but with the 1%+0.30 model I break even at $120.

If the cap were changed to $1 ($1.30 w/fixed) then this would be an enticing offering. Thoughts?

@jkwade

Hey @ithielnor with 1% + 30¢ you'd pay $2.05 to move $175. How much are you planning to charge your customers? Are you planning to charge a fixed fee only (i.e. $1.50)?

@ithielnor

My client's average charge is $220. They currently get a rate of $1.25 per transaction. I think I could convince them to switch as long as their per transaction fee were not over $1.50.

@jkwade

hey @ithielnor we understand the $5 cap doesn't work for everyone, but we heard from many of our existing customers that it does, while still giving Balanced enough upside to merit supporting this technology at the time. My CEO/co-founder, @matin, explains in this comment that the $5 is the current cap, but we're planning to reduce the cost to a fixed fee over time.

Why are you not interested in using the other ACH service you mention that offers $1.25 instead of Balanced?

@ithielnor

I'd like to use Balanced because you offer tokenized transactions (reduced PCI requirements), much better APIs, marketplace escrow, and the potential to also us Credit Card processing through the same API. In short, you guys offer a compelling feature set.

Basically there are two players in the payments market that I like, Balanced, and Stripe. Stripe does not offer ACH at this time (though I've been told by their devs it is "on the roadmap"). There's not much difference in price for CC, but your escrow features and ACH would be the winning factors for Balanced if only ACH were economical for large transactions. Integrating with another vendor is yet another API to integrate with, and potentially increased PCI requirements.

I'll keep an eye on your prices but for now I'm afraid I will have to choose another vendor.

@matin
Owner

@ithielnor: We plan to continue lowering the price. So far, we've reduced the price from 1% + 30¢ by adding a $15 cap and then a $5 cap. That trend will continue.

@jkwade

Volume pricing discounts for ACH Debits being discussed on #473

@rmanisha

@matin @jkwade I'd like to re-open this issue for discussion. Would it be possible for us to move to a fixed price for ACH debits?

@msu03

@martin @jkwade you guys have built an awesome product. Any update on the ACH cap? I want use it to collect rent which will be large transactions so in interested in a lower cap. Thanks!

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