We are a small ($25m) community bank. We would like to offer an automatic (ACH) payment option on loan products. Currently we only auto debit (manually) in house accounts. How do I go about determining a break even point for ACH services? Any recommendations for ACH vendors? Help!

We are with Fiserv ITI outsourced and they handle our ACH for us. I have not even considered calculating a breakeven on ACH as it has got to be the cheapest way to do business period. The per item cost is no where near the cost of handling loan payment or any other service that can be handled through ACH - you should contact your IP vendor for ACH services or a recommendation as do who they are now working with. Do not, under any circumstances, try to originate ACH entries inhouse. Accepting ACH payments, deposits (payroll), should be a given for any small bank, but it needs to be one step removed with warehousing, etc. performed by a vendor, hopefully the primary IP vendor.

"Do not, under any circumstances, try to originate ACH entries inhouse."


V2 - Why do you say this?

Thanks.

(edited for fat fingers...)

ACH origination is a big hassle and if debits are involved there is a lot of liability. We originate one large payroll through FISERV-ITI that was virtually set-up by FISERV with little assistance from us. Originating ACH debits is something that we have decided not to do at this time, due to limited staff, so we primarily process ACH entries (debits and credits) from other financial institutions and that has a minimal impact on staffing with an occasional stop payment on an ACH debit the only task that comes up from time to time.

Don't get me wrong, ACH origination (debits and credits) works well, but take a look at the ACH rules and regulations, that is one thick book.

I don't think that originating ACH is that big of a deal. There is some real nifty software out there that makes it a snap for small banks. It usually comes with boilerplate agreements,etc. There are a few operational issue to handle, but it's better to satisfy the needs of a customer then let him go down to the "big" bank.

Actually, you are correct - nothing in banking is any big deal, it's just a matter of time, staff and whether or not there is sufficient business to off-set the cost of the noted software and processing expense. It is not cheap to original ACH, all things considered, but if it's a product that has a following, go for it.

Thanks for the responses.

rlcarey - Where would I look for software?

One you could try is the Troy Group, their website is Troy Group Website. This is not an endorsement and I have no financial ties nor am I long or short any stock!!! Am I covered under the new SEC rules now ???

Thanks! BTW, I think it's called 'networking'...

Ms.Banker. We process for small, medium, large mechanst as well as for some financial insitution. I would be more than happy to offer you our services. Please go through our site www.ncmsco.com and let me know if you are interested.

Thanks

We are just getting into the ACH originations side and I am working on our agreement with our customer and the related forms. Are most people using the NACHA suggested form? Anything we need to add to NACHA's form? Anyone have one they want to share?

Thanks!

Ms.Banker. We process for small, medium, large mechants as well as for some financial insitutions. I would be more than happy to offer you our services. Please go through our site www.ncmsco.com and let me know if you are interested.

Thanks

Another company that offers ACH origination products is Politzer & Haney, Boston. Their Web site is www.ph.com.

Thank you all for the responses. Unfortunately, management has decided against ACH origination citing cost. I was unable to get the cost breakdown I needed. I feel like I was sent on a snipe hunt

Betty, I didn't know there were snipe in Minnesota! I grew up in Nebraska where snipe hunting was a popular pasttime.

cwilliams: I grew up in Des Moines and now live in Minnesota. I haven't been on a snipe hunt, but even though the local college football team around here is the Gophers many cities and counties in Minnesota offer a bounty for killing gophers!

I'm originally from SD, the snipe hunting capital of the world. I wasn't sure anyone else would know about snipe hunting! Good to know I'm not alone...

Oh Ted, how could you go to the "other side"? And even after all those bad jokes Minnesotans tell about Iowans too!

Betty, those little snipes sure do get around! Must be because they are so hard to catch.

cwilliams: I haven't really gone to the other side - I just live here. I would be the first to contribute to the bounty fund on gophers. By the way, Iowans have been known to tell quite a few Minnesota jokes as well. It's been pretty easy since Minnesota elected a pro wrestler as it's leader!

Yes, you are right Ted, it has been way too easy since Jesse has been governor. I stand corrected!

Thanks for the site.