Determine standardized volume pricing for ACH Debits

[jkwade]

@taylorbrooks was asking about volume discounts for ACH Debits on Twitter. Balanced is open to the discussing that idea here.

[taylorbrooks]

Was more or less asking so I could find a loophole to 1.9%. (e.g. take out a 5mm loan, process through Balanced then get the volume discount. rinse, wash, repeat.) :)

Seems like my evil plan won't work. :(

[jkwade]

@taylorbrooks you sneaky bastard! ;)

It doesn't necessarily make sense for us to mix our credit card (CC) and ACH Debit (ACHD) price discounts because the economics of each product are so different. Our costs for CC come mostly from the credit card networks (interchange) and risk (fraud, underwriting). Our costs for ACHD come mostly from risk (fraud), there's very little network cost. The risk and underwriting cost mitigation steps for CC are much better known and we can negotiate discounts at scale. The risk mitigation steps for ACH are poorly developed within the industry and there's much less room to negotiate volume discounts. As a result I think the most reasonable price discounts for ACHD would be for lowered risk, not volume

[taylorbrooks]

Yeah I get it. I'd be curious to know how my marketplace ranks on fraud risk. Not necessarily to other marketplaces on Balanced, but in general.

Like a "fraud score". I'm sure you guys have some internal tools like this?

[jkwade]

@taylorbrooks we tread pretty lightly on exposing internal fraud metrics and heuristics as they can be used against us by the fraudsters. Not saying we can't expose something like this, but we'd have to be very thoughtful about it. I'm more interested in what we can do to streamline our underwriting and review process such certain customers that we're confident will have lower risk get a lower ACHD price

[pbatchu]

@taylorbrooks - We are a new startup working with schools, pre schools and non-profits. I am hoping your streamlined underwriting and review process will lower ACH fees for our members

[jkwade]

We will not be implementing standardized volume pricing for ACH debits. We'll handle price discounts on a per customer basis.