When it comes to getting paid, you’ve got options. ACH payments and credit card transactions each have pros and cons, so it’s worth comparing them closely to see what fits your business best. Below is a quick side-by-side overview, followed by deeper details on how they stack up.
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ACH payments |
Credit card payments |
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Processing flow |
Bank-to-bank transfer through the ACH network |
Routed through card networks, issuing & acquiring banks |
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Revenue impact |
Best for predictable and recurring payments |
Best for increasing average transaction size due to rewards incentive & credit availability |
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Processing fees |
0.5%–1% per transaction |
2.5%–3% plus per transaction |
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Processing time |
Slower: funds in 3–5 business days |
Faster: funds in 1–3 business days |
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Customer Experience |
Best for automatic recurring payments |
Best for one-time and impulse purchases |
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International Processing |
Only works for U.S. Transactions |
Designed for global transactions |
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Compliance Requirements |
Governed by NACHA rules; requires a signed authorization form |
Must meet PCI DSS security standards |
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Security risks |
Higher fraud risk if customer bank details are stolen and misused. Hard to verify if payments are made by the actual account owner |
Fraud detection tools help protect merchants |
How are ACH and credit card payments processed differently?
ACH (Automated Clearing House).
To accept an ACH payment, your customer first signs a NACHA-compliant authorization. This gives you permission to transfer funds directly from their bank account into yours using the ACH network. It’s a secure, bank-to-bank method that moves money electronically without extending credit.
Credit cards.
Credit card transactions take a different route. When a customer pays by card, their details travel through the card networks (e.g., Visa, Mastercard) and the issuing and acquiring banks. The issuing bank quickly checks available credit or limits, then approves or declines. If approved, funds settle to your merchant account through your processor and acquirer.
ACH vs. credit card: which is easier for customers to spend more?
Credit cards can lift average order value because customers can borrow instantly and often earn rewards like points or cash back. For retail, ecommerce, and wholesale, accepting cards can encourage larger purchases.
ACH shines for predictable, recurring payments—subscriptions, payment plans, and installment-based services. SaaS companies, gyms, and membership businesses use ACH so customers can opt into automatic billing without manual approval each cycle.
Is it cheaper to accept payments by credit card or ACH transfer?
Credit card processing fees typically range around 2.5%–3% of the transaction amount.
ACH transfers usually cost less, often around 0.5%–1% per transaction. Lower costs make ACH popular for recurring billing and high-ticket invoices—savings compound as volume grows.
Keep in mind there are other fees to consider:
• Card chargebacks: If a customer disputes a card payment, fees can run $15–$35+, win or lose.
• ACH returns: If a customer’s bank rejects an ACH debit (e.g., insufficient funds, no authorization), return fees are commonly $10–$15.
While many processors keep these fees regardless of outcome, Liftoff Platform takes a merchant-friendly approach: if you successfully dispute a credit card chargeback or prove an ACH transaction was valid, Liftoff Platform refunds those chargebacks and return fees, helping you protect revenue.
How long does it take to receive payment via ACH vs. credit card?
· Credit cards: Typically, 1–3 business days to settle.
· ACH: Typically, 3–5 business days to reach your account.
ACH takes longer because transactions are batched and cleared through the network multiple times per business day, with final posting after network verification. Credit cards are faster, which can help with cash-flow timing for inventory, payroll, or reinvestment.
How do ACH and credit card payments affect the customer experience?
ACH payments require customers to provide routing and account numbers and sign a NACHA authorization. That setup step can feel slower at first, but once in place, automatic debits make future payments effortless.
Credit cards are quick and familiar. In person, customers tap or insert; online, they enter card number, expiry date, and CVV. Compared to ACH, card details are easier to locate and type, which boosts conversion for impulse or one-time purchases.
Bottom line: Use ACH for larger or recurring invoices where cost savings matter more than speed. Use credit cards for frictionless checkout and higher conversion in retail and ecommerce.
ACH vs. credit card: which is better for international transactions?
Credit cards are the clear winner for cross-border sales. ACH is designed for domestic (U.S.) payments, while card networks operate globally and handle currency exchange behind the scenes. You may pay higher processing fees, and cardholders may see currency conversion charges, but acceptance is simpler.
How do compliance requirements differ?
ACH compliance follows NACHA rules. You must collect and retain valid customer authorizations and follow formatting, timing, and return-handling requirements.
Credit card compliance follows PCI DSS. Your providers must be PCI-compliant, and you’re responsible for annual self-assessments and secure handling of card data within your scope.
What are the security risks?
ACH risks
• Phishing for bank details: Fraudsters steal routing/account numbers and initiate unauthorized debits.
• ACH kiting: Criminals exploit processing delays by moving funds to inflate balances, then pay you; later, banks reverse entries, leaving you short.
Credit card risks
• Stolen card data: Skimming or phishing can lead to fraudulent purchases and subsequent chargebacks.
In both cases, reversed payments mean a loss of goods/services. Liftoff Platform provides fraud-prevention tools and workflows to help you screen risky transactions and reduce exposure.
How to accept credit card and ACH payments at low fees
If you’re looking to accept both ACH and credit card payments cost-effectively, Liftoff Platform is an ideal option:
• Transparent pricing: Interchange-plus for cards and competitive ACH pricing to help lower total cost.
• Virtual Terminal: Process EFT and ACH payments online without extra hardware.
• Invoicing: Send online invoices, automate reminders, and handle late payments.
• Recurring Payments: Automate billing, customize subscription plans, and manage installments.
• Payment Pages: Add secure payment functionality to your website with minimal setup.
No monthly subscription required, no hidden fees, and no long-term contracts—just straightforward processing designed to help you get paid faster and keep more of it.
FAQ
What are the potential chargeback scenarios for ACH and credit card transactions?
Credit card chargebacks happen when customers dispute a charge for reasons like fraud, billing errors, or dissatisfaction. For ACH, returns occur when a customer disputes or didn’t authorize a debit, has insufficient funds, or provide incorrect banking details.
Which payment method offers better fraud protection—ACH or credit cards?
ACH generally offers fewer built-in tools for merchants. Credit card processing typically includes more advanced fraud screening. Liftoff Platform analyzes factors like address consistency, IP/geolocation, and order history to flag risky transactions and help reduce fraud losses.
Are there hidden fees with ACH and credit card processing?
Credit cards may include additional fees for chargebacks, PCI compliance, monthly statements, or currency conversion. ACH may include fees for returns, reversals, or failed transactions.
How do these methods impact cash flow?
Card payments settle in 1–3 business days, which accelerates cash flow. ACH generally settles in 3–5 business days, which is slower but often cheaper—improving net margins on recurring or high-ticket payments.
What is the role of banks in ACH and credit card transactions?
For ACH, banks act as ODFI (originating bank) and RDFI (receiving bank) to move funds securely through the network. For credit cards, banks act as issuers (providing credit to cardholders) and acquirers (processing merchant transactions). Issuers authorize transactions; acquirers settle funds into your merchant account.