ACH — the Automated Clearing House — is the US network for moving money directly between bank accounts. It carries payroll, direct debits and bill payments. For merchants it is dramatically cheaper than cards and dramatically slower, which decides where it fits.
The cost difference is not marginal
| Amount | Card at 2.9% + 30¢ | ACH at 0.8% capped at $5 |
|---|---|---|
| $100 | $3.20 | $0.80 |
| $500 | $14.80 | $4.00 |
| $2,000 | $58.30 | $5.00 |
| $10,000 | $290.30 | $5.00 |
The cap is what makes the difference dramatic. Card fees scale forever; ACH fees stop. Above roughly $1,000 per transaction the gap becomes impossible to ignore.
Where ACH fails
- Speed. One to three business days. Unusable where access must be immediate.
- Conversion. Entering account and routing numbers is far more friction than a card, unless you use a bank-linking flow.
- US only. Other countries have their own systems — SEPA in Europe, BACS in the UK.
- Returns. Insufficient funds and closed accounts fail days later, not at the point of payment.
Where it wins
ACH is compelling wherever the payment is large, recurring and expected: B2B invoices, high-value subscriptions, rent, tuition, professional services retainers. In all of these the customer knows the charge is coming, so the friction of setting it up is paid once and the saving recurs.
A common pattern is offering both and nudging toward ACH above a threshold — some businesses share the saving by discounting ACH payment slightly, which still leaves them far ahead.
GOOD QUESTIONS
Frequently asked
How much does ACH cost compared to cards?+
Typically 0.5–1% capped at a few dollars, or a flat fee of 25¢ to $1.50, versus roughly 3% uncapped for cards. On a $5,000 invoice that is often the difference between about $5 and about $150.
How long does ACH take?+
Standard ACH settles in one to three business days. Same-day ACH exists at a higher fee. Neither is instant, which is why ACH suits invoices and subscriptions rather than checkout.
Can an ACH payment be reversed?+
Yes. Consumers have 60 days to dispute an unauthorised debit — considerably longer than most merchants expect, and longer than many card scenarios. Business accounts have a much shorter window, usually two days.
Should I offer ACH alongside cards?+
If your average transaction is large and recurring, almost certainly. On a $2,000 monthly invoice, ACH saves roughly $55 every month versus card. Below about $100 the saving rarely justifies the worse conversion.