IVR Payments and ACH Processing

Will accepting ACH via IVR Payments improve your receivables? Organizations and businesses who invoice their customers are always looking for efficiency and reduction of costs associated with receivables. Many times this means exploring various payment channels that could be employed. There are a number of different payment channels, and also subsets of the payment channels that are created using today’s technology that offer added value to both merchant organizations and their customers.

A payment channel is a method in which a customer remits a payment. For example, a face to face exchange of a value of currency is a payment channel, no matter the form the currency is exchanged in. In other words, the value of currency might be from a credit card, paper money or a bank check. In this case the payment channel happens to be face-to-face. Some other payment channel types:

• Payment by phone
• Internet
• SMS
• Truncation of a paper bank check

Subsets of the payment channels are often software applications that provide value to at least one of the two parties involved. A perfect example of this would be Payments by Interactive Voice Response, also known as IVR Payments. Another closely related payment channel subset would be a web based invoice/bill search and pay system. They are closely related for a few reasons; A, most every business who would choose to employ IVR Payments would most likely benefit from a web based invoice payment system, and B, the two systems are configured and populated with customer billing data in the same fashion.

Organizations and business that might utilize IVR Payments generally know their customers well. They have an ongoing relationship with them in that their customer has benefitted from the organization’s services or products, and generally continues to do so. In some instances the organization might also be utilizing a recurring billing method for receivables, assuming the payments are for the same amount in each payment cycle frequency. Quite simply, there are some customers who simply choose not to enroll in automated recurring payments. This is one driving factor for organizations to adopt other payment channels such as IVR Payments.

In other organizational scenarios the billing amounts are not the same each month, and while there are API payment integrations possible for the billing organization to create and employ a quasi-recurring payment scenario, the varring billing cycle amounts tend to be met more favorably in some organization types if the cycle payment amounts are “approved” on a case by case basis. In other words, if an organization is billing a customer for services that vary from $100 on one given month to $3,000 on the next billing cycle, the customer is less likely to give carte blanche to the billing organization to debit them without first checking their balance and granting approval.

As you probably already know, eCheck transactions are processed at a much lower rate than credit card transactions. As we have stated above, organizations that might utilize IVR for payments most likely know their customer well and have an ongoing relationship with them. They’re not selling a widget and shipping it with never hearing from them again. This makes ACH Payments (eChecks) an ideal payment modal for employing along with IVR Payments, especially for higher dollar transactions that invoice billing is generally associated with, e.g., loan payments or professional services.

In next weeks blog post we’ll examine how eCheck and credit card processing costs can be offset when using IVR payments by way of convenience fees.