ACH or Credit Cards? Which is better for me?
The money from ACH transactions does not get transferred to your account immediately. ACH transactions usually take from 2-5 days for the money to transfer or for the transaction to be rejected (usually for non-sufficient funds, or NSF).
What is the Cost?
For credit card processing you will pay:
- A monthly fee of USD$10-$20
- A per-transaction fee of about USD$0.20 per charge
- A percentage of each transaction, which will vary from about 1.7-2.0% for swiped transactions to 2.0-3.5% for batch (non-swiped) transactions.
For ACH processing you will pay:
- A monthly fee of USD$10-$20
- A per-transaction fee of about USD$0.25 per charge
- NSF fees of USD$2-$4 for each rejected transaction
Bottom Line: If your members never bounce an ACH transaction, then ACH is less expensive. Otherwise the NSF fees can add up. But it really depends on your member demographics.
How long before I get my money?
Credit cards win here. It takes 3-4 business days for ACH funds to appear in your business bank account, and it may take 4-5 days before you receive notice of a rejected transaction.
Credit card transactions clear in real-time — you will know immediately if a charge was approved or declined. And the funds should appear in your bank account the next day.
Which is more convenient for members?
Almost everyone now carries a credit card or a bank card with the VISA or MasterCard logo. Fewer people have checking accounts.