ACH payments and credit card payments can both help businesses collect money electronically, but they use different payment networks and customer workflows. The appropriate choice depends on the business model, customer preferences, provider terms, and payment process.
What Is ACH Payment Processing?
ACH payment processing allows eligible businesses to receive or send authorized payments electronically through compatible bank accounts and payment systems. The ACH Network supports consumer, business, and government payments, including Direct Deposit and Direct Payments.
Businesses may use ACH for invoices, subscriptions, memberships, service agreements, retainers, and business-to-business payments. The exact authorization requirements, limits, processing times, and return procedures depend on the provider and transaction type.
Learn more about ACH payment processing through Payment Circle.
What Is Credit Card Processing?
Credit card processing allows a business to submit an eligible card transaction through a merchant-account and processor arrangement. The transaction may begin at a website checkout, payment terminal, mobile device, or virtual terminal.
A card-payment setup may include a merchant account, payment gateway, processor, acquiring institution, card network, and the customer’s issuing bank. The exact structure depends on the provider.
Review Payment Circle’s merchant account solutions and payment gateway options.
ACH vs. Credit Card Processing Comparison
| Area | ACH Processing | Credit Card Processing |
|---|---|---|
| Payment source | Compatible bank account | Eligible credit or debit card |
| Common uses | Invoices, recurring bank payments, B2B payments, services | Online checkout, retail, remote payments, subscriptions |
| Authorization | Requires an authorization suitable for the ACH payment workflow | Requires a valid card-payment authorization and provider controls |
| Customer experience | Customer provides approved bank-payment details or uses a connected flow | Customer enters, taps, inserts, or provides eligible card information |
| Returns or disputes | ACH returns and disputes follow applicable provider and network rules | Card disputes and chargebacks follow provider and card-network processes |
| Timing and pricing | Determined by the ACH provider, financial institutions, and account terms | Determined by the merchant account, processor, card type, and provider terms |
When ACH May Be Worth Considering
ACH may fit businesses that issue invoices, collect recurring bank payments, accept larger business payments, or work with established customers who prefer account-based billing.
Examples may include professional services, SaaS companies, membership businesses, wholesalers, agencies, education providers, and business-to-business suppliers. Eligibility and provider support vary.
When Card Processing May Be Worth Considering
Card processing may fit businesses that need a widely recognized customer checkout experience, online card acceptance, in-person payments, virtual-terminal entry, or immediate transaction authorization responses.
Cards may also be important when customers expect to use a credit or debit card rather than entering bank-account information.
Can a Business Offer Both?
Many businesses may benefit from offering more than one approved payment method. For example, a company might accept card payments for online purchases and ACH payments for invoices or recurring business accounts.
The business should confirm that the merchant account, gateway, ACH provider, website, accounting process, and customer-support workflow can manage both methods accurately.
Important Questions to Ask a Provider
- Which ACH and card-payment methods are supported?
- What customer authorization is required?
- What are the processing and settlement schedules?
- What pricing and account fees apply?
- Are transaction limits or reserves involved?
- How are ACH returns and card chargebacks handled?
- Does the setup support recurring billing?
- Can it connect with the website, invoices, or accounting workflow?
- Which reports are available?
- What security and access controls are provided?
Protect Payment Information
Businesses should collect and submit payment information only through approved payment systems. Do not store complete card or bank-account information in unsecured email, spreadsheets, ordinary chat messages, or unprotected notes.
PCI DSS applies to entities that store, process, or transmit payment-card data. Bank-account data is not automatically payment-card data under PCI DSS, but it still requires appropriate protection and may be subject to other provider, legal, contractual, and security requirements.