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How a Lender Can Make an End Run Around ACH

ach payment card

When lenders collect payments from consumer or business accounts via ACH, the network charges 15 percent for declined transactions and 0.5 percent for unauthorized returns. To eliminate ACH charges, FPS came up with the Bolt Virtual Payment Card. The card is an instant issue funding mechanism for sending money enabling lenders to transfer funds via the ACH network into the bank account of their customers. This lessens the chance of a delay in transfer. It also moves funds as promptly as an e-mail and allows lenders to send funds at any time. When money is sent, the lender gets an e-mail with a password that allows them to access the card’s funds.

Flex Payment Solutions (FPS) launched in 2015 to bring innovative solutions to the world of payment processing. Headquartered in a St. Louis suburb of Missouri, the company is an offshoot of PH Financial Services, a family-owned lending business and offers a pair of proprietary solutions for lenders that eliminate the need for monitoring payment requests all the time. Founder Rob Zeitler has served as director of an electronics payment company for 16 years.

FPS’s parent company comprises more than 150 people and see more than $17 million annual revenues. The vision behind FPS was to provide a non-NACHA solution for credit and debit transactions.

With a Bolt Virtual Payment Card, a lender can provide customers with more loans each month. It’s accepted at all MasterCard locations and customers can spend available funds within 20 seconds of transfer. The lender has no ACH fees.

Lenders also have access to an analytics report to help them understand customer spending patterns. Like a real credit card, it has a CVV number on the back. After satisfying customers with its credit product, FPS began developing a product for debit side payments called eCheck 21.

eCheck 21 is a debit solution for lenders with no NACHA and threshold stipulations. It takes customer payment requests, which are converted into digital checks. Further, these checks are submitted to the partner bank to settle payment at the lender’s account. For collecting payment from customers, lenders do not need to get support from the banks they have an account with. It sets up a lender’s account with the Flex Payment’s partnering bank. eCheck 21 is top of the list for most lenders as the price is very affordable as compared to ACH network. Lenders need not worry being dropped from the ACH network or paying fees for threshold returns. Through eCheck 21, a lender can get money faster than a debit card as funds are available the next day. The only constraint attached is that a lender is allowed to debit customer account only three times.

Other FPS services include Flex Account Verification, Flex Customer Identification, debit card processing, and ACH debit processing.

  • Flex Account Verification: Delivers real-time confirmation of account status, information about fund availability and fraud history on an account with 95 percent of total coverage. This solution provides lenders with a data report outlining suggested a course of action for each bank account.
  • Flex Customer Identification: Knowing your customer is necessary to secure business from all types of customers. FCI is 99 percent accurate in identifying customer is and developing a risk profile.
  • Debit card processing: Provides a 100 percent domestic solutions to licensed lenders for Visa/MasterCard debit processing. A lender no longer has to face debit card processing problems of related to distant locations.
  • ACH debit Solutions: Provides licensed lenders with ACH debit solutions. As lenders, inclination towards ACH options is decreasing because of high return rates and NACHA regulations.

The FPS business model is based on volume. The company develops its products in-house and in partnership with banks. Since it is a volume-based model, it includes flexible monthly pricing terms. Lenders get a 90-day trial with no customization for $5 and no setup fee. Once a lender is fully on-board, they receive a customized branding of their card, email, and portal.

The price for the eCheck 21 service is also based on volume, but with a slight difference. For every debit transaction, FPS charges a nominal fees ranging from 50 to 75 cents. The charge for returned checks is no more than $3 compared to $8 to $10 with the ACH network.

In the first quarter of 2017, FPS is looking ahead to launch a digital check product that initiates payment with customers rather than lenders. If regulatory authorities do not change their standpoint on covered loans, FPS will incorporate a system where customers can make payments after signing on the digital check. The expect this to increase the company’s share in mobile P2P payments. FPS is definitely on threshold of creating a new paradigm in the payment solutions world.

Authored with Heena Dhir.


Allen Taylor
Allen Taylor


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