Why Offer ACH Origination Service To Your Customers?

* Check volume is being replaced by the growth of ACH electronic transactions within the financial industry. Your business customers are being required, not only by the government, but also by their own trading partners, to transact business electronically. Today, some vendors will not even do business with another vendor if that company cannot generate electronic transactions.

* Your competitors are now, or soon will be, offering these services to your customers. They will bundle these ACH services with other electronic services in order to convince your business customer to move their business to your competitors financial institution.

* The perception by your current and new business customers in your institution’s ability to support their needs, is very important to your financial institution. Your business customer may not use all of your new ACH services today, but the comfort of knowing your institution is there when they need you. This provides you with a competitive advantage.

* There is an investment to start the program. However, the return in your investment will be realized in the future growth of your financial institution. Your competing financial institutions generate income by charging their business customers for the use of the ACH system. Your institution can pay for its investment by charging for your new service and by reducing your internal operating expenses. It is estimated that we would only need 15-20 business customers in order to justify the cost of the Magic-Wrighter ACH system. More than 20 business accounts would generate an ongoing additional revenue stream for your institution.

* You will realize internal savings in several areas, including the reduction of payroll check cashing and processing. The national average cost for cashing a payroll check is about $0.98. For each business customer’s employee who converts to electronic payroll direct deposit, your institution would reduce check cashing costs. You can also eliminate loan coupon books and manual posting of loan payments you currently receive through the mail.

* We have learned other financial institutions have expanded their business customer base by offering ACH payroll direct deposit. These institutions have designed their ACH programs to include assistance to the business customer in establishing the company’s payroll direct deposit program. They offer the company assistance in explaining the advantages of payroll direct deposit and establishing their employees on the program. At the time the financial institution is explaining the advantages of payroll direct deposit to the employee, they also introduce their institution’s full array of financial services. These institutions have learned if they can get the entire paycheck of the employee, they are more likely to cross sell other financial services and expand their loan portfolio.