April 25, 2023

How to Get Consumers to Make More ACH Payments


Michael W. Kahn

Michael W. Kahn


photo of luis guzman, dave glaser and Serenie Gagon

(L-R) Luis Guzman, Dave Glaser and Serenie Gagon

LAS VEGAS—You’re at the online checkout ready to complete your purchase. How do you pay? 

For most consumers it’s with a credit card, which leads Dave Glaser to this question: “How do we motivate consumers to use pay by bank?” 

“Consumers today are motivated by that idea that they can do chargebacks if something goes wrong with their orders, so they have loss protection, but also, they’re motivated by their points, or their miles, or their rebates,” said Glaser, President and COO of Dwolla. “There’s a missing sort of loyalty component today for using our bank accounts to pay.”

It’s a hurdle, but not one that Glaser sees as insurmountable. In fact, he believes there’s “a huge opportunity to create loyalty at the point of sale for bank payments.”

“Costs are lower, so that could be interesting,” said Glaser, suggesting that businesses could offer a discount for ACH payments—the opposite of tacking on fees to pay by credit card. 

It’s just one possibility, with Glaser confident there’s “a big opportunity” to expand the use of ACH this way, and “a great opportunity for innovators to start cracking some of these nuts.”

Glaser was at the April 17 Smarter Faster Payments 2023 session “Accelerating the Shift to Digital Payments,” where he was joined on the panel by Serenie Gagon, Vice President, Product, Payment Solutions, Mastercard. 

Gagon said security and ease are always top of mind in any type of payment, and best practice for account-based payments involves “making sure that the person who is connecting the bank account has the authority on that account.” 

At the same time, “The trick with having security and preventing fraud is you don’t want to introduce so much friction that it’s not worth it for a consumer or user to use that payment method or to use that tool,” said Gagon. “It’s about letting the good guys through, with less friction, and minimizing the challenges that they face.”

Panel moderator Luis Guzman, Nacha Senior Director, Business and Product Development, said that as the ACH Network continues to evolve to meet today’s payment needs, maintaining its integrity is also critical. Guzman said Nacha is laser focused on security, with enhancements including the Account Validation Rule and a new Risk Management Framework to combat credit-push fraud. 

The complete session “Accelerating the Shift to Digital Payments” will be available during Remote Connect, May 8-10. Learn more at the Remote Connect website.