Rails and ACH payments

[Brian Cardarella]

Has anyone worked with doing direct deposit going out to vendors via
ACH from a Rails app? I've done plenty of apps were we accept money
but I'm currently working on a marketplace app that requires
transferring that money out. Stripe doesn't support this scenario (at
least not in a straight forward manner)

- Brian

[Chris Rhoden]

As far as I can tell, you will need to get access to a gateway with direct access to the ACH network. There don't seem to be any consumer-focused providers (in the way that stripe is consumer focused) out there that I could find. The best way to handle performing ACH transfers directly is probably to see if your bank provides any sort of API access for their billpay offering.

I guess it sort of depends on the scope of your project, but it seems unlikely you will be able to plug directly into ACH if the project is small enough that you're using stripe.

The other options are things like PayPal, Dwolla, and Amazon FPS.

- Brian

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chrisrhoden

[Pascal Rettig]

We've done the standard WEB (Internet Initiated) ACH transactions with Authorize.net's Ruby library - https://developer.authorize.net/downloads/ - it has support in the API for all the different types - PPD (Prearranged Payment Deposit - sending money to consumer checking accounts) and CCD (Cash Concentration Disbursement - sending money to business checking accounts) but we haven't tried using those to do deposits and I don't know what eCheck (the provider that Authorize.net comes with) is set up by default to allow.

-Pascal

[Dan Croak]

There don't seem to be any consumer-focused providers (in the way that stripe is consumer focused) out there that I could find

Whoever creates "Stripe for ACH" will have a very nice company on their hands, indeed.

[Dan Sharp]

Brian,

Braintree Payment Solutions supports this. I built an app that allowed people to put in their checking/saving account and the app could do ACH deposits to them. They are a very good payment processor from a Rails perspective, although I haven't used them in about a year.

-Dan

[Brian Cardarella]

Braintree has some major blockers for this app. The first being the
price to use Braintree. The second being the turn around time with the
money. When acting as a marketplace that is just getting going you
really want to get the money to the vendors as soon as possible, keep
them happy and using the system.

I think the solution I've convinced my client to go with is to do
direct deposit with the online banking system for his business
account. It requires more manual effort but it is a low cost solution
until the business model can be validated.

- Brian

[Vikram Kumar]

Our research indicates the opposite. I also know of few other local,
successful companies who have come to a similar conclusion.

Considering the cost and maintenance of development of in-house
billing/payment models and the features that Braintree offers (dunning
management, number portability, API simplicity, more payment options,
international payment options), Braintree is more economical unless
you are into very large number of transactions and it is a business on
margins.

Talk to me in private if you are interested in knowing more.

Vikram

- Vikram

[Brian Cardarella]

Vikram,

I agree but only after the business model is validated and the scale
of the business is such that it justifies the development costs. In
the mean time it costs the client nothing more than scheduling a few
direct deposit payments. This is a low participation, high price
marketplace. It might take 2 months to get to first 100 transactions.

- Brian

[Michael Breen]

Bill.com allows you to pay vendors via ACH. Uber uses their service to pay the drivers. Bill.com will also print and mail checks.  Their solo plan is $24 per month.

Disclaimer: I've never used Bill.com and I have no idea if they even offer an API but it may be worth a look.

[Chris Rhoden]

It's nowhere on the main navigation of their website that I could find, but it looks like this might be a cost-effective solution.

http://www.bill.com/developer/apidocument.php

I am glad this thread is continuing even though Brian is no longer in need of more ideas. I think that billing and payments are really tough, until i.e. stripe or FPS. Are there any other similar apps that anyone would recommend for any aspect of the billing/payment process?

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chrisrhoden

[Bob Breznak]

To the general payment processing questions, what makes PayPal A non-viable solution? There are a number of complaints floating around about the company, but what are the actual hurdles that developers are facing?

Sent from my iPhone

[Chris Rhoden]

Hey Bob,

I think that for what it does, it's probably fine. The issues I am aware of are:

* It is not, first and foremost, designed so that users can stay on your site. While going to paypal so that a user doesn't need to trust the site with their payment information is a really good option, it doesn't scream professional if it's the only option. And I think I have heard of ways that you can integrate paypal this way, but it doesn't seem like it's a highly supported option.

* The number of times that Paypal has royally screwed users for no reason and with absolutely zero recourse is, while I am sure a small percentage of the overall, nonzero. It makes me very very very nervous.

* Paying out to users via their paypal account is convenient, but it's not ACH (well, often it is, except twice). Users will need to remember to transfer the money out of their paypal account if they want to access it from their normal bank. This will increase both the effort and time required by the user.

Now, here's what I know: PayPal is the only option worth discussing for international payments at a smaller scale.

I am curious, since I expect that you have a bit knowledge on the subject, does PayPal support the 3-party payments that FPS does? This is what makes Kickstarter possible, since they as a company never need to accept your money on behalf of someone else and thus aren't opened up to a regulatory nightmare.