ACH or Credit Cards
by: Wayne Akey
Most businesses accept credit cards and consider the process fees a cost of doing business. However by implementing an ACH payment system you can realize dramatic savings and increase sales.
ACH refers to the Automated Clearing House and generically means moving money electronically to and from checking and savings accounts. An example would be a check by phone or taking recurring payments directly from a checking account.
The MAJOR difference between ACH and credit card processing is that a credit card transaction captures the merchant’s funds from the consumer and essentially guarantees payment. An ACH transaction is a request to transfer funds. The transaction may reject for several reasons with the most common being NSF (non sufficient funds) or a closed account. The funds are not guaranteed.
It is the guarantee piece that allows the credit card company to charge a percentage of the transaction to cover the risks involved. Typically a transaction will consist of a discount rate.
Contrast this with an ACH transaction. Typically there is no discount rate just a .30 (or less) transaction fee. Certainly you will have more failed sales due to ACH transaction rejects (eg NSF) but your transaction savings will far exceed these losses.
So consider ACH processing for your business. It will save you money and win new customers.
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posted by Sukanta at 2:38 PM
8 Comments:
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Get ready to make your Internet / Ecommerce sales explode! www.nwcmerchantaccounts.com offers the quickest way to start accepting and processing all major credit cards online at the lowest possible cost. Thanks to our unique programs we can offer some of the lowest rates in the industry and one of the highest approval ratios anywhere. If you are in need of a credit card processing then www.nwcmerchantaccounts.com can help you today. Come visit us for a FREE no obligation quote and super friendly helpful advice on all your credit card processing needs.
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i was always under the impression that credit card processing and debit card processing were done in the same way- banks verify availablility of funds before approving the transaction. i didnt know that you could potentially use a debit card without any funds to back up the transaction.
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