GoCardless, the leading global fintech for recurring payments, will today launch a new solution on its platform supporting debit payments on the ACH (Automated Clearing House) network.
This presents businesses worldwide an opportunity to revolutionise the way they collect funds in a market where 60% of B2B payments are still taken by paper cheques. By using the ACH debit network on the GoCardless platform, merchants can pull payments directly from their customers’ bank accounts, at a lower cost than credit cards and without the overhead and burden of cash and cheques.
In addition, businesses using the GoCardless ACH debit solution will gain increased visibility over their payments flow through a fully automated collection system. This includes a range of information to help them better manage and reconcile their payments including due dates, successful payments and failed payments – along with the reasons why.
By announcing the addition of ACH debit, GoCardless completes its unique global debit network, covering over 30 countries and accessed through a single API and platform.
Hiroki Takeuchi, CEO of GoCardless, says: “Our aim is – and always has been – to help our customers focus on growing their business without worrying about how they’re going to get paid. Adding ACH to the GoCardless platform will give businesses across the globe access to the world’s largest market, helping them unlock new revenue streams.
“With the launch of our ACH solution, we now cover 70% of recurring payments worldwide across more than 30 countries, including the US. We’re excited for our customers to harness our unique global debit network, helping them to drive down costs, reduce failure rates and decrease involuntary churn every time they get paid.”
Expansion into the US debit ‘rails’ marks a significant milestone in GoCardless’ mission to build a global direct debit network on a single platform, and reflects a growing demand for ACH debit. In 2018 – the fourth consecutive year in which the ACH Network added more than one billion new transactions – the system saw 23 billion transactions, of which 13.4 billion were debits.
It is expected that by 2020, ACH will become the most widely used B2B payment method in the US as changing attitudes continue to sweep the nation: 80% of businesses in the US now prefer to receive their B2B payments via ACH debit, whilst 53% of consumers share the same payment preference for recurring bills.
According to research from GoCardless, one in five US customers prefer to pay for subscription services by bank debit, yet only one of the world’s top 44 global subscription companies currently offers the option. This represents a huge opportunity for businesses that can provide alternative payment methods.
Sarah Grotta, Director Debit and Alternative Payments Advisory Service, Mercator Advisory Group, said: “Consumers and businesses have continued to find new uses for ACH payment transactions despite the fact ACH is a forty-year-old, batch-based solution. We find that there is strong growth recently for ACH in bill payments and on-line and mobile payments and also person-to-person (P2P) transactions.
“When making payments, particularly recurring payments for bills or subscription transactions, consumers may not always want to pay with their credit card as they don’t want to run the risk of interest rate charges. Merchants and billers like to encourage the use of ACH as it can be an economical payment choice and bank account details change less frequently than card numbers, reducing the amount of payment maintenance.”