How ACH actually works
ACH stands for Automated Clearing House, the network banks use to move money electronically. A customer authorizes a transfer from their checking account, and it settles over one to a few business days, rather than the near-instant authorization of a card swipe or tap.
Cost comparison
ACH transactions are typically priced as a flat fee or a small percentage with a cap, rather than the percentage-based pricing common on cards. For larger transaction amounts, this can be meaningfully cheaper than card processing.
- Card fees scale with transaction size; ACH fees are often capped
- ACH has no interchange, since no card network is involved
- Card payments settle faster than ACH transfers
- ACH carries a real, if usually small, risk of returned or failed transfers
Where ACH fits best
B2B invoicing, recurring membership or subscription billing, and large one-time payments like deposits on major services are common places ACH makes sense, since the cost savings on larger amounts are significant and speed is less critical.
Where cards still win
In-person retail and restaurant transactions, anything needing instant confirmation, and situations where the customer expects to tap a card or phone are all places cards remain the practical choice — few walk-in customers want to type in bank routing numbers at checkout.
The risk of returned ACH payments
Unlike an approved card transaction, an ACH transfer can still fail or be returned days later due to insufficient funds or a closed account, sometimes after goods or services have already been delivered. This delayed risk is worth factoring into which transactions you accept ACH for.
Setting up ACH alongside card acceptance
Many modern invoicing and payment platforms support both ACH and card as payment options on the same invoice, letting the customer choose. Offering both often increases the odds of getting paid promptly.
What customers experience differently
ACH requires entering bank account and routing numbers or connecting a bank account directly, which is a slightly higher-friction process than tapping a card. It tends to work better for planned payments than spontaneous ones.
Deciding what to offer
For most retail and restaurant businesses, cards remain the primary method with ACH playing at most a supporting role for invoicing. For service businesses that regularly bill larger amounts, offering ACH alongside cards is often worth the setup.