Open Banking platform Plaid and digital payments company Square have partnered to enable US merchants to more easily process ACH payments without the need to hold sensitive bank information.
According to Plaid, ACH payments debited directly from bank accounts tend to be a lower-cost, more accessible alternative to credit cards, but despite this, cards have remained the default in eCommerce payments.
Through the partnership, merchants in the US will now be able to accept ACH payments through Square Invoices and developers can enable ACH payments through Square Web Payments SDK, “without worrying about bank authentication or any managed payment complexities”.
Square’s tokenised check system uses Plaid to allow customers to securely connect their bank accounts for bank payments, with this verification option meaning customers can quickly enter their bank login credentials to connect an account to enable payments, Plaid said.
“Payment flexibility, security, and transparency are core to Square’s payment platform,” Dennis Jarosch, head of payment platform at Square, said.
“By offering ACH payments, we can help businesses process large transactions online at a low cost without worrying about bank authentication, compliance, or any managed payment complexities. We’re excited to offer ACH as one of many ways that businesses get paid fast and securely with Square.”
In an effort to make ACH acceptance even easier, Square will offer fee-free refunds on ACH payments it processes.