ACH Payroll Processing & Fedwire Blog

ACH Payroll Processing & Fedwire Blog

Pop Quiz: Is Your ACH Payroll Service Provider Ready for a Crisis?

Monday, August 19, 2019
Pop Quiz: Is Your ACH Payroll Service Provider Ready for a Crisis?

Crisis Averted: Avoid Creating a Domino Effect of Crises with Cachet in Your Back Pocket

A British tanker seized by Iran in the Persian Gulf. Rumors of an upcoming recession. Dangerous heat waves and flash floods.

It’s one crisis after another some days. Just ask KeyBank of Cleveland.

They’re suing an Indiana company it claims deposited worthless checks and then asked for wire transfers against the checks, resulting in a major loss of revenue. According to the Cleveland Plain Dealer, KeyBank estimates their potential revenue loss to be between $90 and $220 million.

Now that’s a crisis.

KeyBank isn’t a small operator – the Federal Reserve lists them as the 20th largest bank in the U.S., and the Plain Dealer reports they have $138 billion in assets across the nation. Still, a potential $220 million loss is an immense blow, and it speaks to the extreme danger fraud presents to provider and client alike.

For providers, it shows how dangerous careless mistakes can be. For clients? A loss this big is the kind of thing that can make a bank ditch certain critical services. Permanently. So ask yourself this: if your current payroll provider decided the service wasn’t worth the trouble, where would that leave you today?

A Culture of Crisis Response

The hard truth is crises happen in business. Everybody at some point faces a major, earth-shaking challenge. It’s in the response to those challenges where businesses prove their worth to their clients.

Here’s an example: Last year, there was an electrical issue near our Pasadena headquarters which required us to temporarily evacuate our offices. In our business, even a temporary crisis can create problems for us and our clients.

The thing is, nobody from Cachet went home. Our team stayed on their phones, our systems were still online and we were able to process transactions and keep our clients’ money moving. The electrical issue was resolved, there was no damage to our facilities and our business went on as usual the next day.

In fact, we’re willing to bet if you’re a Cachet client, this is the first you’ve heard of it.

Crisis met, crisis averted. How?

We faced a problem that day by keeping our heads and working through it. That same calm, cool and collected crisis response is in our blood – it’s why we were able to grow our business during the 2007-2008 economic crisis and its aftermath.

“Cachet actually grew during the double recession,” says Summer Poletti, Vice President of Sales for FBG Holdings, Cachet’s parent company. “Because Cachet was able to mitigate its risk heavily and not get into trouble, it was able to take on clients that were shut off because their ACH provider went out of business, or their bank stopped providing ACH services.”

A Destination for Businesses Left High and Dry

It’s arguable that payroll may be the single most important service any company needs – regardless of the industry, employees need to get paid, accurately and on time.

When a business suddenly loses their payroll provider, it can throw them into chaos.

The problem is, adopting a new ACH platform takes time. The new provider needs to perform due diligence to make sure everything is as secure as possible, and the company’s employees need to be trained on how their new platform works. Plus, the rush to find a new payroll provider can drive some businesses towards providers who may not fully understand the payroll process.

“ACH isn’t simple. It’s complicated,” says FBG Holdings’ Vice President of Marketing Jeanne Rogers. “And it doesn’t matter if the economy is performing or not, you can still have a provider who doesn’t understand the ACH process and isn’t able to roll with the punches.”

“When it comes to crisis mode and someone needs an ACH provider right away, typically the process takes about 90 days,” says Poletti. “But sometimes people don’t have that 90 days because they’re in a bind. We’re willing to expedite the process and what we’ll do is put them on wire services during the emergency situation.”

During that time, Cachet performs a variety of checks and balances to ensure both provider and client are as secure as possible. “We do a lot of due diligence so we can make sure nothing like a $200 million loss happens,” says Poletti. “The reason why we put people through these super-stringent policies is to avoid situations like that.”

Cachet also uses the time to walk their new client through our processes and makes sure the new client understands how Cachet’s platform works. “We can do it in a couple of days if needed,” Poletti says. “We will teach you how to run an incredible payroll processing business.”

“When it comes to helping out people in a bind, this is where Cachet shines.”

Due Diligence Protects Clients, Too

Cachet’s commitment to security extends to our clients. Internal SOC I audits and a $50 million crime bond ensure client and provider alike are protected from fraudsters. Moreover, our Quantum platform helps providers and clients catch catastrophic losses before it’s too late.

Finally, our sister companies Payroll Tax Management, SBS Payroll and Time Rack share the same commitment to crisis response and security.

If you’re worried your ACH provider is looking to make a quick exit from ACH services, click on the link below or give us a call.

Contact us today to learn more about security for payroll providers

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