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Will “Post no B2B debits on my account” ever end in US?

Our item on the progress of the first 11 processing days of newly implemented Same Day ACH system in the US where NACHA report that only 6% of the first 2 million debits were business-to-business raised CTMfile concerns about the likely demand for this service:

CTMfile take: It would be interesting to know why only 6 per cent of the Same Day ACH debit payments were B2B - will businesses embrace faster payments more in future?

Consultant’s reaction

One well known international cash and treasury management consultant came back anonymously on our question, saying:

“It’s because US Corporates are deeply suspicious about the whole concept of a third party being allowed to take money from a corporate bank account. So much so that the US is the only market as far as I am aware where the banks will offer “post no debits” as a control feature. There is some justification for this inasmuch as the protections against fraud and error are not as generous as, for instance in SEPA DD.”

Indeed some of his US clients have “no DD under ANY circumstance” instructions at their bank.

Some vital questions

The early usage of B2B direct debiting in the USA and the consultant’s reaction raises vital questions”

  • Is it just a matter of time before US businesses get used to the new scheme?
  • Will US businesses ever embrace Same Day ACH debit payments or will they never trust B2B DD?
  • Are SEPA DD type controls needed for businesses to accept SD DD in USA?
  • Are other controls needed as well?
  • Should NACHA not be worried as the use of direct debiting for B2B business is not important?

US missing the opportunity for a new business model?

In Europe and around the world new business models are emerging in which consumers and businesses are moving to recurring/subscription payments as part of the regular service they receive. SlimPay, a pan-Europe subscription payment service covering 35 countries for collecting consumer-to-business recurring payments. It is already used by 2,000+ merchants across Europe which range from the very large, e.g. EDF, tripadvisor, to SMEs throughout the region. Basically, SlimPay provides a smart recurring payments gateway based on direct debit for B2B payments as well as B2C direct debiting. 

The economics of these new recurring/subscription based business models are both cheaper to operate and generate guaranteed income streams which is what every CFO dreams of. 


CTMfile take: Is the US going to miss out on these new business models due to the innate conservatism of their CFOs and the lack of adequate direct debiting controls?

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