Home > Features > Online Billing: The ACH Option • Bookmark   • Newsletters   • Register Search Options


Online Billing: The ACH Option

Online Billing: The ACH Option

December 24, 2013
Text size: 
View in Digital Mag
Get XBIZ News
XBIZ Research
Will virtual reality boost the paysite market?
Yes, it will soon
Yes, but in a few years
Out of 179 votes. Results based on votes submitted by members of XBIZ.net social network.

" When the consumer’s preferred method of payment fails, the merchant has an opportunity to not lose that sale but instead present the natural flow of alternatives that they would like to give the consumer. "

Have you ever stood at a checkout line, swiped your card of choice and then were told that it failed? When that happens, what is your next move? Many of us will swipe the card again thinking that the result was a fluke the first time but the next time it will be fine. Then when that attempt inevitably fails, we pull out our second favorite points program card and try it. If that fails, you can always try your bank card or a check or perhaps even cash. Rarely, do we just walk away without the item we wanted to purchase.

In the online world, it is much easier to simply walk away. When the consumer’s preferred method of payment fails, the merchant has an opportunity to not lose that sale but instead present the natural flow of alternatives that they would like to give the consumer. This is where alternative payments, like direct debit, prudently increase the merchant’s bottom line.

The merchant has the consumer at their site and the merchant wants them to pay. Often the consumer will enter in their credit card details but they have already given the merchant some of their relevant details like their name, and some address information such as their postal code or ZIP code. When their initial payment details fail, this is an opportunity to direct the consumer to try again with another payment instrument. How the merchant presents this next option is the difference between the consumer trying again at this site or at someone else’s website.

When presenting the consumer with options and prepopulating data the merchant wants to be sure that they are adhering to any data storage rules, etc., that are in use by the various card associations and consumer protection agencies but of equal importance is the convenience for the actual consumer as they are the decision maker on trying again.

Creating a flow that encourages the consumer to try again will be a combination of appropriate messaging about the failure of their last attempt and the ease and confidence of their next attempt. Encouraging a consumer to correct information on their current entry is a great option if the failure is related to some bad information such as an AVS failure but is completely useless for a more permanent error such as a lost or stolen card.

If the failure was of a more permanent nature, then a reasonable option is to ask for a new payment instrument. This is where an alternative payment instrument such as ACH can be leveraged. By offering ACH as an option the merchant can save the sale as well as get a long-standing customer.

I would also encourage merchants to offer alternative payments, like ACH, as a payment method up front and allow the consumer to choose between the various payment methods for their first choice and then provide them options when, and if, their first choice fails. After all, consumers like to feel that they have choices.

Five Things You Didn’t Know About ACH

  • All ACH transactions are regulated by a non-government entity and have to comply to the NACHA rules.
  • A check is only an ACH if it is converted as such and there are strict rules as to how and when you can do that.
  • When a consumer’s bank account information is changed at a bank, the consumer’s bank will process the transaction with the old data and then send through a notice of change record to the merchant’s bank.
  • Banks can tattle on each other at the NACHA.ORG website by filing a “possible rules violation in the national system of fines.”
  • NACHA doesn’t actually handle any of the transactions; they are simply the association that oversees the network.

Melody L is chief operating officer at L3 Payments.


The Skinny on the New DMCA Requirement

The requirements under the Digital Millennium Copyright Act (DMCA) have changed, but the sky is not falling. We have, even as a law firm, been hit with an unbelievable amount of spam sent out by law firms... More »

2017 Outlook: Legal Matters Around the Corner

The adult entertainment business’ legal community recently weighed in the top issues that companies and the industry, as a whole, should be concerned about. XBIZ asked industry attorneys to discuss... More »

Fraudulent Brazilian Trademark Registrations Running Rampant

Although you might not think often about protecting your trademark rights in Brazil, you need to — even if you don’t yet have a single Brazilian customer. Scammers are constantly looking for... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ Premiere magazine, the industry's leading adult retail trade publications, delivering the most timely and comprehensive business news and information to producers and retailers of adult products.


The European Summit

Mar 04 - Mar 07
Barcelona-Sitges, Spain

The TEA Show

Mar 05 - Mar 06
Hollywood, CA

Phoenix Forum 2017

Mar 23 - Mar 26
Tempe, Arizona


Mar 31 - Apr 02
Denver, CO.
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!