ACH vs. Credit Card Payments: 3 Key Differences

If you’re looking to expand payment methods it’s crucial to understand ACH vs. credit card payments. In this article we explore three key differences.

Choosing the right payment methods for your customers can have a significant impact on the success and growth of your business. ACH (Automated Clearing House) and credit card payments are two popular methods, but they are quite different. 

Below, I’ll explore the three key differences between these payment types. Understanding these will help you decide on the best payment methods for your business. 


What Is an ACH Transaction?

An ACH transaction is a direct, electronic bank-to-bank transfer that is processed through the ACH network. NACHA (National Automated Clearing House Association) is the non-profit group that monitors and regulates all ACH transactions. 

ACH transactions are primarily used in the US for B2B payments or recurring payments like utility bills. Customers provide their banking information through your checkout process and then the ACH network draws the funds from their account and deposits them into your merchant account. 

What Is a Credit Card Transaction?

Credit card transactions are another type of electronic payment method. Credit card transactions are processed through the corresponding card networks – for example, Discover, Mastercard, Visa, and American Express.  

Customers provide their credit card details to the merchant through an online checkout page, or an in-person payment terminal. This information is then sent through the credit card network to the acquiring bank, which either approves or declines the request. This happens near instantaneously, so you get the payment quickly

ACH vs. Credit Card Transactions – The Key Differences

Processing Times

ACH transactions typically take several business days to process, from the moment the transaction is initiated until the funds are deposited into your account. This is because ACH payments are processed in batches once a day. 

In contrast, credit card transactions are processed within a matter of seconds or minutes. This is often more convenient for both you and your customers, as you’ll receive their payment much faster than ACH and they’ll have payment confirmation. 


Credit cards often have hefty fees for merchants. This is mainly because of the higher risk of fraud and chargebacks when customers use them. These fees vary depending on the specific card processor, but generally range between 1.4% and 3.5% per transaction. 

ACH transactions, in comparison, have some of the lowest fees of any electronic payment method as it’s generally a very secure payment method. Typically, ACH payments have a flat fee that is much lower than credit card fees, so it can be especially beneficial for merchants when dealing with larger transactions. 

Guarantee of Payment

Credit card payments are “guaranteed fund” transactions. That means that as long as the transaction was processed correctly and the customer is within their credit limit, you’ll receive the full payment. 

On the other hand, ACH transactions don’t happen immediately. Since they are only processed in batches, you might find that they are rejected several days after the initial transaction. Rejections can happen for a variety of reasons including insufficient funds, a closed bank account, or a stop payment request. 

Should Your Business Accept Credit Cards or ACH Transfers?

Depending on your specific business needs, ACH or credit cards may be more popular with your customers. However, we always recommend providing both and letting your customers decide what works best for them.

Offering convenient ways for customers to pay how they prefer helps increase customer satisfaction, reduce cart abandonment, and provide an overall positive shopping experience. 

The Benefits of Working with as Your Payment Service Providers is an excellent choice for businesses looking for a payment solution. There is a wide variety of payment methods you can choose from including credit cards, debit cards, ACH, and more. 

Some other benefits include:

  • User-friendly setup: Get up and running quickly with our user-friendly, no-code solution or integrate our system into your website using our advanced APIs.
  • Enhanced security: supports 3D Secure 2.0 for added protection against fraudulent transactions.
  • Customer insights: The intuitive Pay Dashboard allows you to track your transactions, pull reports, and get detailed customer analysis. 
  • Global payment processing: Accept payments from customers all around the world.

With a transparent pricing policy and no hidden fees, you can feel confident in your choice to work with 

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The Bottom Line

ACH and Credit cards payments have different usages for merchants and customers alike. While ACH may have lower fees, it’s also less convenient for many customers. On the other hand, credit cards have higher risks of fraud, but are more widely used. 

The best option is to incorporate both as payment options and let your customers decide. makes it easy for you to set up a payment system that offers all the payment methods your customers prefer. 

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What’s the best way for a business to accept online payments? is the best way to accept online payments. Once you’ve signed up, you can create a fully customized checkout page using our beginner-friendly pre-built template or integrate it directly on your site with our advanced API options. From there, you’ll be able to accept a variety of payment options from your site with ease!

Why is ACH better than credit cards?

ACH is often seen as a more cost-effective and secure option for merchants, compared to credit cards. While credit cards have high percentage-based fees , ACH transactions have flat fees that are often much cheaper. ACH also has a much lower fraud risk, though unlike credit cards, you won’t be guaranteed payment right away.

What is the difference between ACH payments and debit card payments?

ACH payments and debit card payments are both electronic payment methods that draw funds directly from the customer’s bank account. However, ACH transactions are processed through the ACH network and are generally much cheaper than debit card processing fees. Debit cards are processed through specific card networks, much like credit cards.

Is ACH more secure than credit cards?

ACH is generally considered more secure than credit cards. The ACH network is a non-profit entity that regulates and monitors ACH transactions. Because they are completed directly between accounts and done in batches, there is less of a risk of fraud. Credit cards, on the other hand, are often the subject of fraudulent behavior through theft, phishing, or hacking.

What is the difference between ACH and bank transfers?

ACH and bank transfers are both a type of bank-to-bank transaction. However, ACH transactions are processed through the ACH network and are mostly used for lower-value or recurring transactions. Bank transfers are faster as they happen bank to bank directly, but they often have higher fees. They are mostly used for high-value, one-off transactions.

Meet the author
Ashley Hague
Ashley Hague is a B2B writer based in New Zealand. Specializing in fintech, SaaS, and sustainability in business, she helps businesses achieve their goals. When not working, she can be found rock climbing or delving into a historical biography.
The Best Way to Accept Online Payments makes it easy to accept a variety of popular payment methods online. From credit and debit cards to ACH and digital wallets, you’ll be able to pick and choose the methods that work best for you and your customers.

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