In the world of commerce, Visa and MasterCard have long reigned supreme. But businesses and customers are burdened by Visa and MasterCard’s recent rate hikes. This hidden cost, often unnoticed, is becoming harder to ignore.

Enter Automated Clearing House (ACH), a payment method gaining traction. ACH transfers are electronic payments that move money between bank accounts. It’s a system that’s been around for decades but is only starting to get mentioned.

With the rising costs of credit card transactions, now is the perfect time to switch to ACH. It’s more than a cost-saving measure. It’s about adopting an efficient, secure system to change how we manage transactions. The future of payment processing is here, and it’s called ACH.

The Basics of ACH

ACH is a network coordinating electronic payments and automatic money transfers. It’s a system operating under the National Automated Clearing House Association (NACHA). But what does this mean for you?

Imagine sending money from one bank account to another without go-betweens. The system cuts out the middleman, allowing faster transactions. With ACH, your money moves on your terms.

ACH vs. Visa and MasterCard Credit Card Transactions

Paying via credit card

ACH offers a key operational benefit — easier reconciliation.

Credit card transactions go through several stages, each adding time and cost. From approval to batching, clearing, and settling, it’s a process that can span several days.

In contrast, ACH simplifies this by directly transferring funds between banks. This system is not only quicker but also more cost-effective. With ACH, you’re not only processing transactions, you’re choosing efficiency.

On average, credit card payments involve more parties during processing, like networks, issuers, acquirers, etc., whereas ACH is a direct bank-to-bank transfer. This intermediary cost and complexity is avoidable with ACH.

“The use of Same Day ACH payments grew significantly in the first half of 2023, powering the modern ACH Network to help meet the nation’s needs for faster payments,” Nacha reported.

The Economic Upsides of ACH Transfers

When it comes to transaction costs, ACH has the upper hand. Processing fees for credit cards range from 1.3% to 3.5%. These fees include interchange, assessment, and processing fees. These charges vary based on the business, transaction volume, card type, and payment processor agreement.

ACH charges around $0.26 to $1.50 per transaction as an ACH credit. Extra fees for ACH debit transactions may apply, usually lower than ACH credit fees.

Consider a business processing $10,000 in transactions monthly. With credit cards at an average 2.5% fee, they’d spend $250 on transaction fees. 

With ACH costing $0.50 per transaction, the same $10,000 would incur only $50 in fees. That’s a monthly saving of $200, or $2,400 annually. This fee variance highlights ACH’s cost-effectiveness compared to credit cards.

Streamlining Operations with ACH

ACH offers a key operational benefit — easier reconciliation. Credit card payments can take days to settle and come with complex statements. Yet, ACH transactions are straightforward. Each transaction is well-documented, simplifying tracking and keeping precise financial records.

For service companies, ACH provides flexibility and an improved cash flow. ACH can schedule payments, allowing businesses better financial management. This predictability helps avoid cash flow problems and ensures smooth operations.

Security Aspects of ACH

ACH payments are safe and reliable. It remains secure, even with a 40% increase in fraud attempts since COVID-19. 

ACH transactions use several security measures, including encryption, authentication, and authorization. ACH Rules demand banking information sent over the internet use encryption technology.

All ACH parties must have systems and controls to protect data and install access controls. This condition includes both financial and non-financial sensitive information.

Recurring Payments with ACH

ACH allows businesses to set up auto payments, ensuring no missed costs or late fees. Once established, charges are deducted from the customer’s bank account automatically.

Recurring ACH payments offer businesses several advantages. It provides consistent and predictable cash flow, which is vital for financial planning. It also reduces the administrative effort of collecting payments, saving time and resources. 

Likewise, customers value the comfort of recurring billing, boosting consumer happiness and loyalty.

Big Transactions? No Problem with ACH Transfers

ACH is a superior choice for large transactions. ACH allows transferring large sums of money at low costs — unlike credit cards using Visa and MasterCard with limits and higher fees. NACHA states ACH transfer limits can reach $1,000,000 daily. This feature is beneficial for businesses that often process large transactions. 

Using ACH for large transactions lowers fees, avoids credit card limits, and gives peace of mind with secure transfers.

The Catch: No Guaranteed Payment in ACH

While ACH has many benefits, it doesn’t guarantee payment. ACH transactions can return if there aren’t enough funds or the account is closed. A charge might seem successful initially but can reverse within a few days.

Businesses need to consider this aspect of ACH. Although the risk of payment reversal is low, it’s a chance that requires preparation. Measures include confirming bank accounts before processing or setting up systems for returns. 

Overcoming Concerns About ACH

Switching payment methods to ACH may seem intimidating at first. Businesses worry about disruptions, staff learning curves, and customer confusion during the transition.

However, these concerns are typically unfounded. The ACH transition proves smooth for most businesses, with minimal disruptions reported. Payment processors provide training and support to facilitate adaptation to the new system.

In 2021, NACHA approved five amendments to ease ACH authorization and improve the consumer experience:

  1. Required disclosures are expanded to all debit authorizations, improving transparency.
  2. Oral charges can now occur outside phone payments, enabling new channels.
  3. Standing Authorizations facilitate recurring payments where future debit details are unknown.
  4. More authorization methods are permitted, like electronic signatures and text confirmations.
  5. Reduced authorization storage requirements ease compliance burdens for originators.

These revisions reduce barriers to adopting ACH. So, while valid concerns exist around changing to ACH, its many benefits outweigh the challenges. With proper support, the switch can be seamless.

The Environmental Benefits of ACH Transfers

ACH payments provide a greener way of processing transactions compared to credit cards. ACH stops the plastic waste from producing millions of new credit cards yearly. It also avoids paper receipts from credit card purchases, saving many trees.

It uses bank systems instead of large card network data centers to reduce energy use.

Moreover, ACH incentivizes paperless transactions, lowering paper check usage. Eco-conscious consumers factor sustainability into purchases and want to support green businesses. Offering ACH shows a commitment to reducing environmental impact.

For all these reasons, switching to ACH provides noteworthy ecological benefits.


We compared ACH to Visa and MasterCard credit cards, highlighting ACH’s financial, operational, and security benefits. Now is the perfect time to switch to ACH.

With Visa and MasterCard increasing rates, businesses need a cost-effective option.

So why wait? Step into the future of payment processing today. Consider using ACH with ACHWorks and our sister company Vericheck (VCI) for your business needs and elevate your business. Our dependable ACH processing services help your business thrive digitally.

Contact us via form, phone, or email with any questions.