Canada EFT

The Benefits of Canada EFT

When it comes to managing Canadian ACH, Canada EFT (or Canadian Electronic Funds Transfer) is a convenient and cost-effective solution. By utilizing Canadian EFT, Canadian based businesses can debit checking accounts for one-time or recurring payments. Unlike with credit cards, cross border payments are not available. This means that funds are collected and settled in the same denomination. A U.S. based company looking to debit Canadian customers would need a Canadian bank account to settle funds into.

EFT Processing options are limited in Canada compared to the many ACH processing providers available in the States. This means that options are much more limited, as a handful of banks control the payments realm. It is often difficult to gain access to Canada EFT processing capabilities.

SaaS platforms can automate the payment collection and reconciliation process by integrating a Canada EFT application independently or in conjunction with a U.S. ACH processing solution.  A single system capable of managing both U.S. and Canadian e-check transactions, and reporting data for reconciliation is a very powerful customer acquisition tool and a great payment revenue generator.

Canada EFT Key Benefits and Features:

  • Reduce employee and bank service charges. Making bank trips and paying per check fees are both bottom line drags on your business.
  • Reduce operating expenses associated with collecting/ writing cheques, manual processing, and time spent reconciling accounts.
  • Receive notification of rejected payments. Many times, and especially if working with a bank’s Canadian EFT tools, you are forced to manually deal with payment rejects. Often these can take a week or more to receive notification on.
  • Mitigate the risks associated with cheque fraud and forgery.
  • Preserve the autonomy of your business units while ensuring centralized concentration and control of funds. Automation and systems are the key to scalable growth.
  • Accelerate the payables process and control the timing of credits/debits to your account.
  • Reduce lost and stolen cheques. By moving money electronically you reduce risk of paper cheques being lost or stolen.
  • Efficiently manage cash flow and improve cash forecasting. Reliable, predictable cash flow makes planning much simpler and less stressful.

For SaaS platforms, Canadian EFT will generate new revenue streams, and offer a pathway to create a more useful and sticky end-user solution.

Canada EFT On-Boarding Process

The on-boarding process is a very important process for any organization, and many organizations prefer for the on-boarding process to be a “white label” process where the third party ACH processor remains in the background. In this scenario the EFT integration must provide a way for the organization to send the required merchant’s data to the ACH processor’s underwriting department (ideally in electronic format, including signatures).

The API must:

  • Allow for the application and underwriting process to be presented on their website, as though the ACH payments solution is coming from them.
  • Pass the underwriting data to the processor
  • Notify the parties involved where the application stands
  • Pass API credentials to the applicant user once the merchant application has been approved and enrolled.

The Canadian EFT path that the SaaS organization chooses determines how credentials are passed.In some cases the credentials are passed to the merchant themselves. SaaS applications require the merchant user to enter API credentials themselves, and in other cases the API credentials are passed to the SaaS organization for entry oh behalf of the merchant.

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What to look for in a Canada EFT API:

  • Are there risk acceptance models available that could lower processing costs?
  • Does the partner provide assistance in ACH payments processing adoption for you and your user clients?
  • Are there white label possibilities that might allow for a branded processing option, keeping the ACH processor behind the scene?
  • Does the platform meet PCI Security standards even though NACHA does not require ACH transactions to be PCI compliant?
  • If your market base includes Canada, does the partner provide a single API for both US ACH and Canadian EFT?
  • Is sensitive data tokenized and can a call be made to immediately tokenize the bank account data prior to an origination?
  • Will your potential partner take the time to understand your business requirements and provide options that custom fit the payments needs to your needs and your clients?
  • Are there opportunities to leverage the Canadian EFT Processing Integration for your apps’s revenue stream?
  • Are there ancillary utilities available from the ACH API to make calls for anti-fraud and risk mitigation?
  • How long has your potential integration partner been serving the needs of app providers and what is their track record?
  • What other payment utilities are available?
  • ACH Integration–The Missing piece?
  • API availability: Does the partner offer RESTful, SOAP  Canadian ACH transaction integration or both?
  • Is there an API that would allow your customers to apply from your site or app?

A “Payment Facilitator” (PayFac) can be thought of as being a Master Merchant that facilitates credit and debit card transactions for sub-merchants within their payment sphere.

The advantages to the Canadian Payment Facilitator model

  • Payment aggregation as business model
  • Customers love that it is so easy to get the account going with no paperwork or documentation burdens. This dramatically improves the client boarding process.
  • Buy a Square reader at Walgreens, go online and create your account and within 30 minutes you can be swiping payments. That’s a very attractive acquisition tool.
  • Flat fee structure: Easy to understand flat fees for your merchant customers. No needs to understand interchange tables.
  • Speed of boarding process: Being a Canadian Payment Facilitator allows you the ability to setup sub-merchants very quickly, removing a choke point to new client acquisition.
  • Merchant Control: Sub-merchants are under contract with you, the Master Merchant.
  • Earnings: Master merchants are able to earn money from network and transactional fees, and potentially float. This is the big one for most SaaS platforms contemplating going the aggregation route.

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