XU Magazine - Issue 15

New payment technology helps small businesses save big

29 (1) copy
Written by Tim Preston

How much did your clients pay in credit card fees last year? Chances are it was a lot more than they would have liked. Tim Preston discusses recent advancements and an alternative option in the U.S. payments space.

Small businesses are struck hard by card fees. While true for boutique retail, corner stores, and local cafes, it’s particularly visible for service businesses because the slice taken by the banks on low-volume, high- value invoices can extend into the 3-digits.

This reason alone has kept many businesses out of electronic payments altogether, instead relying on antiquated, insecure checks being posted in the mail.

Or perhaps they have tried other electronic payment methods but given up due to the regulatory requirements, for example collecting and securely storing bank details, authorization forms and signatures, and managing returns, refunds, and disputes.

Previously the infrastructure for electronic bill payment in the U.S. has lagged that of other countries, but recent improvements and new technologies have made this space a lot more viable for small businesses.


NACHA, the authority responsible for the Automated Clearing House (ACH) network, has recently introduced same-day processing for electronic transfers. This significantly reduces risk and improves cashflow for the receiving party by reducing the time to fully complete a payment down to 2 days over the 5-10 seen previously.

Combine that with low fees and ACH becomes a more appealing electronic payment option.


As banks modernize, they are beginning to allow access to customer information via secure online channels. This permits us, for example, to send routing and account numbers directly to an ACH processor on behalf of a customer. We can even check bank balances and obtain electronic consent before issuing debits.

This streamlines the new customer setup process significantly by eliminating typographical errors, paper forms, signature collection, and failed payments due to lack of funds.


Another interesting technology is machine learning and the way it’s applied to fraud prevention. Machine learning is the application of artificial intelligence to allow a computer program to identify patterns in information and subsequently make predictions.

For example, a predictive model of fraudulent activities can be built by training a computer algorithm on previous fraudulent transactions. This model can then be used to identify and block fraud in real- time. Better yet, the model will continue to learn and improve, further reducing the chance of fraud over time.

At receivabl.es we’ve created a novel payment solution by combining new technologies to provide a secure payment flow that rivals the traditional card checkout process. You can benefit from the huge savings that ACH provides, while we handle customer verification, debit authorization and processing, and synchronization of payments and fees back to Xero.

If you can’t give up card payments completely we also offer other interesting features that can help reduce the impact of fees.

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About the author

Tim Preston

Owning and running a consultancy since 2012, Tim wanted a simple, hands-off payments processor that fully integrated with Xero. Not finding anything suitable, he built one. He now spends his time helping small business owners save money on electronic payments.