ACH or Credit Cards


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

Recommended Sites

Related Links

Informative Articles

Choose Credit Cards With Care
If you find that your credit card purchases have exceeded your budget, you may be in need for some emergency credit counseling! Instead of throwing out all of your cards, consider assembling a strong hand of between 3 and 5 cards that will allow...

Credit Cards Making life Easier?
Credit cards are intended to help us. They help us purchase practically anything that we need when shopping on the internet; and when you do, your credit card's information is sent through a secure server. With today's encryption technology...

Credit Cards - The Inventor Of Debt Consolidation Companies
Like with everything good comes something so overly abused, that turns bad. Credit Cards were invented to help others get by without using cash and being able to purchase goods when you can't find an ATM machine to get money from. But, that...

Entrepreneurs (or Anybody Else): If You Must Use Credit Cards, Practice "Safe Swiping"
"But Everybody's Doing It" Are you familiar with that plea some children make in an attempt to get what they want based on the behavior of their peers: "But everybody's doing it"? Should you, as a business founder or one who wants to be, use...

The Key To Increasing Your Customer Base: Accept Credit Cards
Here is a tactic you should heed for your online business... accept credit cards. Whether you're selling digital products or tangible goods through online channels, your business should be able to accept credit cards to ensure the widest customer...

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