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Difference Between Ach Payment Processing And Credit Card Processing

If you are a business owner then it is very obvious that you would know about ACH concept. Close to 50% of the American households use ACH payment processing for the purpose of paying their utility bills. Therefore businesses aim to provide this popular mode of payment in addition to credit card processing facility so that their loyal customer base would grow. ACH is basically a countrywide network which processes electronic financial transactions. Since this mode of payment is governed by the National Automated Clearing House Association therefore it is highly reliable and efficient.

A lot of people are generally under the impression that ACH payment processing is the same as credit card processing. This is certainly not true because there is a glaring difference between the two. In case of ACH real time transaction authorization isnít offered, instead one can transfer funds to a specific deposit account electronically during a pre-determined time period. If your business offers ACH processing service, you would be able to accept payments through the internet, telephone and in-store transactions, which makes it very convenient for both the parties - the clients and the business owner.

Unlike credit card processing, you will actually be able to automatically debit or deduct cash from the bank accounts of your clients via ACH payment processing. Of course, this is applicable only for recurring bills. The deduction of cash is generally carried out within a few daysí time, which makes it highly convenient for all business owners. Owing to this they no longer have to run after their customers in order to make them pay their pending bills or debts. Moreover, with ACH processing service, a business owner can also convert paper checks to eChecks or electronic checks.

Another point of distinction between credit card processing and ACH payment processing is that in case of the former, the company has to pay a huge amount of fees just so that it can accept credit card transactions from their customers. Things arenít the same in case of ACH processing service because one does not have to pay any charge. When you convert physical checks into electronic versions, you will experience more convenience in paying your creditors. Hence, unlike credit cards, ACH payment facility proves to be beneficial for oneís clients, creditors and business/company.

As a business owner, if you are faced with the dilemma of whether you should pay your creditors by means of credit card processing or if you should do the same using ACH payment processing then you should always choose the latter. This is because when you clear off your business loans or when you make payments to your companyís creditors through ACH payment option then your companyís credibility among suppliers, creditors and financial institutions would become stronger. Thus, it would prove to be highly useful for your company and it would even benefit from it.

One of the common questions that people keep asking when they are comparing the two modes of payment is whether ACH payment processing is more stable and reliable than credit card processing. The answer is that ACH is definitely more stable and reliable, which makes it perfect for businesses because no business owner would be interested in using an unstable payment system. Moreover, there are chances of incurring huge losses in case oneís merchant account is unable to provide impressive and consistent service and thus it is best to opt for ACH and provide the option of alternative electronic payment.

People may regard the ACH payment processing to be similar to the manner in which payments made by credit card are processed. But there is a world of difference between the two and over a period of time ACH has emerged as being superior to† credit card processing and hence enjoys wider popularity.