In the not-too-distant past, it was rare to find an integration company that accepted credit cards as a form of payment. Today, you’d be hard-pressed to find an integrator that doesn’t.
Indeed, the payment processing world has certainly changed, and integrators, like many industries made up primarily of small businesses, are evolving also. Long gone are the days of only accepting remittance via checkbooks and cash. In the current business environment, most integrators recognize it’s critical to take payments by credit cards, wire transfers and ACH (Automated Clearing House).
“It doesn’t matter how you want to be paid… it matters how your customer wants to pay you,” emphasizes Adam Holden, Head of Payments at D-Tools. “Integrators should not be dictating to the clients how to pay them. The cost of doing business is the cost of doing business. You want your money from any avenue you possibly can or you risk losing business with specific clients.”
Those simple truths are why D-Tools recently launched its groundbreaking D-Tools Payments solution for D-Tools Cloud. The secure, fully embedded solution enhances an integrator’s workflow with a seamless, secure, and fully compliant payment system. It features an intuitive and expedient onboarding and underwriting process, transparent transaction fees, and faster time-to-cash for ACH payments. Embedded financial reporting makes it easy to reconcile payment transactions and cash deposits.
Since its debut, the response from integrators adopting D-Tools Payments has been remarkable, with descriptions ranging from “amazing” to “game-changing” to “a breeze.” To date, in just a few months millions of dollars in transactions have been processed through D-Tools Payments, which has led to some eye-opening information that can help integrators manage clients’ deposits, process payments, and service charges effectively. Here are four interesting datapoints against which integrators can benchmark their own payment processing experiences.
1. Gauging Average Payment Frequency & Amounts
According to the data gleaned from D-Tools Payments, clients pay via ACH at twice the frequency to credit cards, with 67% of payments processed via ACH compared to 33% via credit card. Moreover, the average ACH payment run through D-Tools Payments to date is more than double the average credit card payment. Specifically, the average ACH payment is $6,727 while the average credit card payment received by an integration company is $2,494.
2. Approval Times Vary
ACH was created in the late 1960’s with the first ACH operated by the Federal Reserve to, in essence, send “digital checks” between banks. That bank-to-bank interaction takes time. There is typically no limitation on the amount. While credit cards have instantaneous approval (literally in milliseconds), ACH approvals can take between two to three days with funding on the fifth business day, on average. An integrator might not know if the ACH transfer is successful for several days, so conceivably four days after the initial transfer the dealer could receive notification that it was denied.
3. Fees and Charges Differ
ACH transfers are less expensive than credit card fees, which is likely a strong consideration as to why integrators might recommend that form of payment vs. a credit card. For example, D-Tools Payments charges 1% for ACH transfers with a cap of $10. So basically, any ACH transfer from $1,000 or more will have a maximum $10 fee. Meanwhile, credit card merchant processing fees can range from 2.75% up to 4% depending on several factors, such as volume, type of card and information collected and sent to the card brands. D-Tools Payments charges fall somewhere in the middle of those percentages, depending on the individual results of the underwriting process.
4. Measuring Deposits vs. Progress Payments vs. Service Charges
The data from D-Tools Payments reveals that integrators are comfortable processing digital payments for deposits, progress payments and service charges. To date, deposits represent 51% of payments, progress payments are 27%, and service agreement fees are 22%.
D-Tools Payments Webinar on Tap for November 7
To find out more about the transformational D-Tools Payments, D-Tools Cloud users can register for a special What’s New in D-Tools Payments webinar on Thursday, November 7 at 1:00 p.m. Eastern. The one-hour educational webcast will include a Q&A session with the D-Tools Cloud product team.
“The value of D-Tools Payments is that it is an embedded feature in the software versus being an integration of a third-party payment processing system, like Stripe or CardConnect or ProPay,” explains Holden. “D-Tools Payments works with every aspect of D-Tools Cloud. “The software runs everything, including the scheduling of the payments, the acceptance of the payments, ledgering it in the appropriate places for the deposits, progress payments, or service contracts. It brings in full transactional reports and full deposit reports tracking the money between the customer paying to the settlement of the funds to the funding of the bank account.”
He continues, “Our solution saves time and reduces headaches by eliminating manual data entry and the need to use multiple systems. Integrators will ultimately save money by spending less time reconciling systems and avoiding errors.”
