The #1 Best Way To Reduce Processing Fees

Shawna: Good morning, everyone, and welcome to today's webinar. We are here live at the Evosus headquarters in Vancouver, Washington, and today we're talking all about The #1 Best Way To Reduce Your Processing Fees. My name is Shawna Mesher, Director of Sales and Marketing, and this is Steve Ruscigno, Chief Revenue Officer. We're so excited to chat with you today. The topic that we're going to be discussing is really all around ACH.

You're probably wondering what ACH is and what it stands for. I know that's always my question; what does that acronym stand for? There are so many darn acronyms all over the place. ACH stands for Automated Clearing House. Essentially, it's just an electronic way to move money from one bank to another. You can really think about it like a digital check.

So, just giving you a little bit of background on what it is we're going to be talking about for context. Steve, I'm so excited that you're the one joining us today because you're brilliant at business processes. Can you, for the audience that doesn't know you (though I know there's probably not many people out there who don't know you), tell us about your past experiences? What's your history? And then we'll talk a little bit about the benefits to the dealer on ACH and all of that.

Steve: Yeah, yeah, happy to be here. I spent 20-plus years running a hot tub company and a little bit of pools here and there. We did a lot of maintenance contracts with our customers on the service side. We did a ton of auto ships and that sort of thing. So, with ACH, I would have loved to have been able to use it back in the day because we had a ton of maintenance and auto ship contracts, as I mentioned. And we'd put a credit card on file for all these people. So then you're paying your regular credit card fees, and you're also paying, in a lot of cases, the not-present fee because you're using that card on file versus swiping or dropping the card. So, needless to say, in our company, it was a huge line item at the end of the year, these merchant processing fees.

One of the big game-changers for me, from a business perspective, is the rate. It’s less than 1%. So if I would have taken my income statement at the end of the year and seen this huge number and known that if I could transition these customers over to ACH versus the credit card, I could save up to 4% on that expense line on the G&L. Which would have been a big saving.

While I always priced in a credit card fee into the price of a big-ticket item, I always had that option to play with the number a little bit more and still keep my margins. Which was hugely important. Then the other thing is, we have these people on yearly contracts. So, I would have really incentivized my customers to sign up for a “get an extra percentage off” one-time incentive or even on buying a big-ticket item. Many, many benefits there for the company because you've got that payment already there, it's already locked in, it makes it easy for the customer, easy for the company, and saves a ton of admin time. Because every month I had to have someone sit down and go through every credit card that was either expired or about to expire or didn't run. With ACH, that would alleviate all that. But I know, Shawna, you and I worked together for about a decade in that business. You spent a lot of time on that sales floor so I'd be interested to hear, how can ACH really benefit the customer or the end-users?

Shawna: Yeah, totally, so I think at the end of the day, ACH is really cool. And there are a lot of obvious benefits to the dealer or the business owner. Your rate is less than 1%, it's really inexpensive, those transactions are going to go through, you don't ever have to update expiration dates. All of those things, but it doesn't work unless you get your end customers to buy into it. If people don't use it, it doesn't save you anything. So I thought a lot about how I would use ACH if I had that opportunity. There are a lot of different ways, but I think the biggest way that I would encourage employees to motivate their customers to use ACH is - let's just go down the big ticket route for a second, because I know most of you guys on the line sell some sort of big ticket item. Oftentimes people would be buying a big ticket item and they ask the question “is there a cash discount” and the answer usually is “no, the price is the price, it is what it is” because we've worked in credit card processing fees into the bottom line. But the answer could be “yes,” the answer could be “we offer a really cool discount if you use ACH,” or “I'll give you a few hundred off.” Super easy to add that payment on file and take the deposit today.

Then what's really incredible, I think, is that bank account info is added onto their file. Then I would say “Mr. customer, what's really cool about this is we'll take your deposit via ACH today. Then I'm going to text you about a week before this big ticket item, hot tub, or pool delivers and ask you if it's okay to run the final balance. You can just text me back, say ‘yes’ or give me the thumbs up and I will run that ACH payment. It will come right out of your bank account, super simple.” And then we're looking at a $10,000 or $20,000 purchase with less than 1% fee. It's on file and then, going a step further, that hot tub or pool is delivered into that customer's backyard and when they need repair, they need more cartridges, they need chlorine, they need to get on an auto-ship or water care maintenance plan and that ACH is on file. So they don't ever have to add any other form of payment on file. We're just using that bank account information so it's a really smooth transition. It's a one-time effort and then you're good to go.

You can do some really fun internal competitions between your salespeople or your employees. Whoever gets the most ACH on file gets lunch or whatever motivates your people, but there are just some really cool things you can do to motivate that end customer to get enrolled in ACH. And again, it's a one-time thing they do it and it's done. It's on file and your business can use it going forward.

Great point.

I really loved, going back to a business aspect you hit on, how we'd introduce a program or something like that in our business. We'd always run a spiff contest and really got it going. And then it wanes because they forget about it, it's not top of mind, and then you fire it back up again. We found that to be really successful. I love that idea.

Shawna: Yeah, that's awesome, that's great. We're going to show everybody on the line today four different ways to either add ACH, use ACH, or update ACH. We're going to jump to the demo part of today's conversation and just walk you through the steps and how it works in LOU. So we're going to pull up our LOU dashboard here and we're going to start going through the process.

The first thing we're going to demo is taking a payment for somebody who already has ACH on file, just to show you how quick and simple it is. We're going to go to Judy Arnold here, and we're going to go to her invoices and find the invoice that she needs to pay. So from here, we're going to enter a $500 payment onto her account and we're going to hit “payment on file” because, like I said, she already has ACH on file. On the dropdown, Judy added a few cards on file before we launched ACH, but now she's got ACH on file and that's her default. That's what she wants to use today. So click on that and we're just going to create that payment here. It's going to ask if you're sure, “yes, I am sure.” Then it's going to make sure these are the last four of her card? “Yes, I'm sure.” We want to make sure that we're picking the right thing here. And once that loads through, I'm going to point out something to you - that was quick! That's it, payment's taken, we're done. At the top there's the outcome box. This is really important for ACH, so I want all of you business owners out there to just listen up. Pay attention here. You'll notice that it says “unsettled”; you need to know that ACH takes a few days to clear. We're electronically moving money from one bank to another. So it's really important that you know it takes 3-5 days for it to settle. You don't want to deliver those goods the day you take the ACH payment. You want to wait a few days, which is why the scenario that I walked you through really works. At the top, you can click on the ACH clearing search and this brings you to a dashboard of all of your unsettled and settled transactions. You can go back in here before you deliver or perform the service to make sure it's settled a few days later and you're good to go!

We're going to go back home and we are going to walk you through a customer adding ACH and making a first-time payment. So for Susan, she's new, she doesn't have ACH on file yet, but she wants to buy something, put ACH on file, and then use that to make the payment. So we're going to enter the payment amount, let's say, $500 today. Keep it consistent and we're going to click on that ACH button. This is going to allow us to add ACH here. Click on “Create” and it's going to say “oh you don't have ACH on file yet.” So we need to add some information here. Tip on this, most people don't carry checks. I don't know if we're all living in that world of people not carrying their checkbooks around anymore. So if you ever run into somebody and they're like “I don't know my bank account info and I don't have a check with me.” It's super accessible via their bank account information. Oftentimes, if it's not on their app they need to just go to the web browser version of their bank account. So usbank.com or chase.com whatever they bank with and you can view it that way on the “desktop version.” Most everybody can access this information from their phone. They don't need to wait till later. So if you have any hurdles or objections like “Oh I don't have that info, I'll do it later,” you can push back a little bit and say, “actually let me help you, let me walk you through. It's super easy.”

So Susan's bank account info is here. We're going to check that box at the top that says “keep account information on file for future transactions,” obviously. We're asking Susan “are you okay if we add this onto your file? We can use it later and you can opt in for that.” And we're going to authorize, that gives you that alert we talked about earlier. “It takes a few days to clear” We're just going to confirm that this is the right bank account info. So once that's loaded then we could take a payment, if we wanted to do so.

So from here, we're going to move into the customer portal section. This is, I gotta say I don't like to put favorites on things, but this is one of my favorite, favorite ways to use ACH is through the customer portal. It puts the onus on the customer and it also allows them to do things on their own terms. I think everybody in this era wants to be in control, especially when it comes to their finances and money. So for this, we are going to make a payment. Judy has a balance due for us and she needs to go in and make a payment before we perform the next service. You have a few options, card payment and ACH payment would be adding those types of payments on file. If Judy didn't have those things on file she'd check one of those boxes, but she knows that she already has payments on file. She's a regular customer of ours so she's going to check ACH and we're just going to continue on. She's going to hit “confirm” Payment successful! So Judy knows that that payment was successful. She's good and we're good to perform our next service. Then last thing on the customer portal we want to show all of you listeners is how to manage payments on file. So if we just click on the “payments on file” button we can add a card, we can add bank account information, or we can change things here. So there's her bank account and then two cards. She can update it, delete it, or change her default payment method. Lots of different things we can do here. So those are the four ways you can add, take payment, and manage ACH on file. I think I'm going to just take a second here and pass it over to our panelists to see if we have any questions.

Shannon: So we do have some questions. The first one is “when will ACH be live?”

Shawna: Oh, good question.

It is live! ACH is live. This is our kind of launch party, if you will. We've been slowly rolling it out to a beta test group just to make sure that it's super solid, and it is. We're feeling really good about it, so if you are an active LOU client and you would like to introduce ACH as an opportunity for you, you can email EFS@evosus.com and one of the gals over there will be really swift and help you get all set up. There are just a couple of steps we have to go through, and we'll get it taken care of for you. If you're not live on LOU, when you do sign up there will be the opportunity to opt into ACH. So it will be a really simple part of your merchant application process.
Great question. What else?

Shannon: Another question is - it's kind of a two-part question we've had a couple different people ask this so I'll combine it. The first part “Is ACH secure for my customers?” The second part would be, “how do you deal with customers who are not comfortable giving you their bank information?”

Shawna: Oh that's a really good question. So on the line we have Jennifer who is our EFS Champion manager/best person ever. Jennifer, would you mind taking the security part of that question and then I can take the hurdle part of that question?

Jennifer: Yeah, you bet. So you can just reassure your customers that their bank account information is stored securely in our system via encryption. So there's not any way for you to reveal that or any reason why they should be concerned about security.

Shawna: Yeah, and I think that's exactly what I would say. I mean Jennifer said it in about two sentences, that it is absolutely secure, it's encrypted, there's no visible number. So there really is no risk to anything happening. They can be assured that we're PCI compliant and all of the rest of it.

Shannon: Another question, uh let's see. There's three more questions so far. “Is ACH available for Legacy?”

Shawna: It's not yet. It is a LOU specific thing. There are some limitations in Legacy that don't allow us to use ACH there. So it is LOU specific. That's a good question.

Shannon: Two more questions specific to how ACH works. The first is, “can you force a settlement?”

Shawna: oh, Jennifer can I pop that to you?

Jennifer: You betcha! So there's not a way to force a settlement in the software itself, but settlement is set up at the account level and it happens every single day.

Shannon: And then the final question so far is, “what monthly fees may be associated with ACH?

Shawna: Yeah, I'm gonna let Jennifer answer that question because I'm sure she's going to be way more eloquent than I would be.

Jennifer: No worries! There aren't any monthly fees associated with ACH, but there is a quarterly compliance fee.

Shawna: Great, perfect.

And then, as we said earlier, ACH in general your fees are less than 1%. Just to give you comparison to what a credit card processing fee would be. So great.

Great questions everybody! Thanks for all of that.

If there are any more questions, can always email in, you can chat with your account manager if you're live. If you're not live, you can always email EFS@evosus.com the people in that office are absolutely incredible. They're brilliant, this is what they live and breathe, is financial services. And what's really cool about Evosus as a company, is that it's inhouse.

You're not calling overseas. You're talking to somebody in Vancouver Washington who knows your business. Who's really close to your business. We're just here to help you. So if you do have any questions, please email them or chat with your account manager. Anybody here is more than happy to help and if you want to get live on ACH, again those will be the gals that you'll work with to get live on ACH. And if you're signing up for LOU just opt in to ACH when that time comes.

Steve, any final parting words?

Steve: No, I mean, I think you did a great job explaining it, demonstrating it. Again I would have loved to be able to have it as well. So thank you for having me!

Shawna: Yeah, thanks Steve. Great information.

Please join us for next month's webinar. We are going to be talking all about conquering peak season. So whether it is your peak season or not we're going to give you some really tangible, cool tools to dominate your peak season. That is on June 5th 2024.

So thank you so much for joining. We really appreciate it. Again, Jennifer and Shannon, thank you for rocking the panel and all of the questions that came through. We really appreciate it and have a great day!