ACH or Credit Cards


Credit Cards : ACH or Credit Cards	Homepage \| Add to Favorites

Recommended Sites

Related Links

Informative Articles

3 Reasons why to Accept Credit Cards by Phone
Conducting business today, whether online or offline, Is much more convenient than before using a simple and Inexpensive way by accepting credit cards by phone. This Method of accepting payments is turning the heads of Business owners and...

Accepting Credit Cards on your Website
If you are building an online shop, you will need to address the question of taking payments for orders. You can, of course, request that a check payment be sent to you in the mail. Most shopping basket software allows you to select this option when...

Credit Cards and Secured Credit Cards
Credit cards are of everyday use for a lot of Americans. Even people with bad credit are getting secured credit cards so they can build their credit. The use of credit cards is not necessarily bad, but needs to be done responsibly. This means it...

The Lowdown On Airline Miles Credit Cards
Airline mile credit cards, also known as frequent flyer credit cards, enjoy tremendous popularity as a type of reward credit card. A cardholder is rewarded with points whenever he uses the card to make a purchase. The accumulated points can be...

The various types of credit cards
There are a lot of credit card companies competing for your business who offer a full range of charge cards in order to be able to suit your needs. Seeking the right information is made easy with help. We have lots of details regarding all...

ACH or Credit Cards

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, 2.5% for example and a transaction fee, typically in the 30 cent range. This means that every $100 processed incurs about $2.85 in merchant fees.

Contrast this with an ACH transaction. Typically there is no discount rate just a .30 (or less) transaction fee. If you process $25,000 per month using ACH processing will save around $7500 per year. Certainly you will have more "failed" sales due to ACH transaction rejects (eg NSF) but your transaction savings will far exceed these losses. In addition you will appeal to a much wider range of consumers. Estimates vary but MANY people do not have credit cards or are at their limit on their cards. So the benefits are two fold-much reduced transaction fees and a new payment vehicle for your customers.

So consider ACH processing for your business. It will save you money and win new customers.

About the author:

Wayne Akey has helped numerous businesses save time and money with ACH processing. Get your free report on how your business can benefit http://www.ach-payments.com/software/secrets.doc or visit http://www.ach-payments.com