This is a Why and How-To ACH Guide from the HappyAR team. We elected to set us a Stripe ACH integration for our payment gateway due to the flexibility of their API and the payment options that Stripe supports. There are other out-of-the-box options to consider, but if you have access to development resources that can connect the Stripe API, we strongly suggest it for the price, speed, security, and flexibility.
This article covers Stripe’s ACH capabilities which we consider to be essential for both B2B and B2C US-based companies that want to offer options to their customers.
What exactly is ACH?
ACH is short for Automated Clearing House and is a network used for electronically moving money (USD) between bank accounts exclusively in the United States.
The network has existed since the 1970s and ACH credit transfer volume is growing consistently each year.
These payments aren’t just for B2B transactions and can also be used for government, consumer, and even some international payments.
ACH transactions take around three business days to access and appear on your bank statement depending on several factors with timing, your bank, and the client's bank.
What is Stripe?
Stripe provides APIs that web developers can use to integrate payment processing into their websites and mobile applications.
Businesses of every size from new startups to public companies like Salesforce and Facebook use the company’s software to accept online payments and run complex global operations. The company combines economic infrastructure with a set of applications for new business models like crowdfunding and marketplaces, fraud prevention, analytics, and more.
The company was founded in 2010 and is headquartered in San Francisco, CA.
Learn more about Stripe here
What is Plaid?
Since 2016, Stripe and Plaid have partnered to offer seamless bank account verification for their customers. Any evaluation of Stripe’s ACH functionality will inevitably include a look at a Plaid account.
Users can instantly and securely authenticate their bank accounts through a Plaid link. This eliminates the need for manually entering an account number and routing numbers and then waiting for micro-deposits.
Learn more about Plaid here
Why should I consider adding Stripe ACH to my payment options?
We are huge advocates of offering as many payment methods to your clients as possible to accelerate the accounts receivable process and to make checkout for online purchases easier.
While there are some small downsides to ACH when it comes to refunds, funding delays, and costs associated with very high volumes, the upsides far outweigh these.
These upsides include:
- ACH payments cost way less than credit card payments. There’s no need to add an irritating service charge for your customer or to eat the approximate 3% fee from the credit card network. These charges are very small compared to other payment types.
- ACH payments are open to anyone with a US bank account – both B2B and consumers.
- ACH debits help reduce churn associated with expired credit and debit cards. Bank account details may change, but all credit card information needs to be renewed periodically.
Keep in mind that refunds and disputes on ACH payments are fundamentally different than those on credit card payments.
If a customer’s bank accepts the request to return the funds for a disputed charge, Stripe immediately removes the funds from your Stripe account. Unlike credit card disputes, you can’t contest ACH reversals, so you must contact your customer to resolve the situation.
How would I go about adding Stripe with ACH payment functionality?
It’s important to note that configuring Stripe functionality, including ACH payments, requires integration experience from a development resource. This is not a plug-and-play software solution for non-technical folks.
There are plenty of resources available that can help you configure the web service, but make sure not to cut corners with inexpensive resources. Thoroughly review the qualifications of developers that you interview and only select ones that have extensive experience with this technology and have strong reviews. Data and application security with payments is critical and you want to work with reputable resources or agencies before there is exposure to your bank information or your customers' bank accounts.
If you want the flexibility and cost savings of hiring an international developer with the confidence that they have been thoroughly screened, consider a resource like Scalable Path – a company that HappyAR has used successfully in the past.
Stripe is a large and very popular technology, so API keys, docs, webhooks, endpoints, and sandbox access will be easily available and very well documented for developers to use.
HappyAR is a seamless SaaS that quickly and easily boosts your accounts receivables workflow.
We partner with various accounting, invoicing, and ERP systems that also allow for Stripe ACH integrations.
We save companies of all sizes thousands of dollars each year by optimizing the speed and efficiency of their collections methods. No more guessing if someone has received an invoice or trusting that it will be paid on time. This is a fully integrated solution that pays for itself over and over each month by preventing defaults and preserving client relationships.
HappyAR is an ever-evolving toolkit that helps optimize your invoice collections process and our pricing starts at $0/month and scales up based on your invoice volume.
Visit us at www.happyar.com to learn more.