Why Faster, Safer Electronic Refunds Help Colleges and Universities Save

By: | April 7, 2021

Most, if not all, colleges and universities would choose any type of electronic transaction over paper checks in a heartbeat since check payments cost more and take longer to process. While consumers agree, the majority of them prefer the fastest refund delivery method.

ACH vs OCT

Between the two electronic refund methods — Automated Clearing House (ACH) and Original Credit Transaction (OCT) — a Visa study found that nine out of 10 consumers prefer the slightly more expensive OCT.

Normally marketed as Visa Direct or Mastercard Send, OCT enables direct transfer of funds to a cardholder’s existing debit card in 30 seconds or less. These types of real-time transactions are available in apps such as Venmo and Zelle, which are popular among students.

ACH transactions take approximately two to three business days. Schools should factor in new 2021 Nacha ACH rules, which require them to validate account numbers and enable end-to-end file encryption when considering whether to sustain their current ACH transaction model.

In addition to being faster than checks, which normally clear within five to seven business days, both OCT and ACH transactions cost approximately $1 or less. Check transactions by comparison cost $6 on average.

How TouchNet Helps Schools Utilize All Three Payment Methods

In the Bill+Payment suite, institutions can provide students with paper, ACH, and OCT options. TouchNet can print and mail checks individually on behalf of schools to students who choose paper checks.

When students choose ACH, schools can process payments through their own bank or have TouchNet fully manage the process. TouchNet also validates account numbers and provides end-to-end file encryption to satisfy Nacha requirements.

For students who choose OCT, TouchNet recently partnered with Checkbook.io, an all-in-one push payments platform that allows schools to have funds withdrawn directly from their account or pre-fund accounts. Checkbook.io also enables schools to customize logos, colors, check images, and messaging and gives them white-label dashboard access.

Administrators can give students the option to have their check mailed, receive their check on any device via an emailed PDF, or name and verify the bank account to which their payment is pushed. Regardless of the method they choose students aren’t required to sign up, download an app, or create a username and password.