For business owners and operators, every payment comes with a price, literally.
New industry analysis estimates U.S. merchants paid about $224 billion in total card acceptance costs in 2023 (including $143 billion in interchange), with credit swipe fees averaging 2.94%.
If you invoice large amounts or bill for memberships and subscriptions, ACH payments often deliver more savings on fees. However, if you want instant approvals at checkout and faster funding, credit cards can help boost conversion rates and get cash into your account sooner.
The truth? The businesses that win are those that utilize both, allowing their payment partner to steer each transaction down the most cost-effective path. In fact, in 2023 alone, U.S. merchants paid $172.05 billion in card processing fees, underscoring the importance of optimizing payment rails in terms of material impact on margins.
In this guide, you’ll learn where ACH or credit card payments save more, how to calculate your real costs, and how to build a setup that protects margins without hurting your sales.
How Payment Method Selection Impacts Your Profitability
Selecting the correct payment method is often overlooked, but it’s one of the simplest ways to boost your bottom line. Even a minor difference in processing fees can translate to hundreds, or even thousands, of dollars saved each month.
The impact of these fees is so significant that it has led to
major legal battles. For instance, a proposed $30 billion settlement between Visa, Mastercard, and merchants was rejected by a federal judge in June 2024. The rejection came after retailers argued the deal didn’t go far enough to lower so-called “swipe fees,” underscoring just how critical even minor percentage points are to a business’s bottom line.
The Real Cost of Overlooking Processing Fees
Business owners are busy, and it’s easy to stick with the payment methods you’ve always used. Many companies default to credit cards because that’s what customers are used to, without realizing the long-term impact on profit margins. However, taking a closer look at your payment strategy can reveal hidden savings that have a real effect on your net revenue.
For example, a one percent difference in transaction fees may not sound like much, but for a business processing $50,000 a month, that’s $500 in pure margin every month, or $6,000 a year. Over several years, that could mean enough for a new hire, extra marketing spend, or a boost to your own take-home pay.
Comparing real-world examples is the most effective way to see the savings potential and make informed decisions for your business.
How do I know if my payment method is costing me too much?
Review your monthly processing statements. If you notice fees eating into your profit, especially if you’re paying a percentage on large transactions, it’s worth exploring alternatives, such as ACH.
How ACH Actually Works
ACH, or Automated Clearing House, is the backbone of bank-to-bank payments in the US. It’s designed for efficiency and reliability, making it
ideal for recurring or high-ticket transactions that benefit from low, predictable fees.
According to Nacha, Same Day ACH now supports payments of up to $1,000,000 per transaction and operates with four daily settlement windows, a change that significantly improves speed and flexibility for businesses relying on bank-to-bank transfers.
Understanding ACH Credits, Debits, and Batch Processing
With ACH, payments are processed in two primary forms:
ACH credit (when you send money out) and
ACH debit (when you pull funds from a customer’s bank account). Most business transactions are ACH debits, think monthly subscriptions, membership fees, or B2B invoices.
What makes ACH so efficient? Batch processing. Instead of handling each payment individually,
B2B ACH payment processing are grouped and processed together at scheduled intervals. This batching drastically reduces operational costs, and those savings are passed on to you as lower, flat-rate fees.
ACH payments are also highly secure, governed by NACHA (the National Automated Clearing House Association), and typically settle within one to three business days. Thanks to recent upgrades, same-day ACH is now an option, which brings settlement times in line with card payments for a modest extra fee.
| ACH Payment Type |
Use Case |
Timing |
Typical Cost |
| ACH Credit |
Payroll, vendor payouts |
1-3 business days |
$0.20–$1.50 per payment |
| ACH Debit |
Customer billing, recurring invoices |
1-3 business days (or same-day) |
$0.20–$1.50 per payment |
What happens if an ACH payment fails?
ACH failures, also known as “returns,” can occur if the account has insufficient funds, is closed, or if the information is incorrect. With 2Accept, you get immediate alerts and guided steps to resolve any failed ACH payments quickly and securely.
According to the Federal Reserve’s Payment Cards Center, card transactions are authorized in milliseconds, then processed through daily clearing and settlement between issuers, acquirers, and networks —a layered process that helps explain both the speed and the expense of card payments.
How Credit Cards Work in Comparison
Credit cards are the go-to choice for speed and convenience, especially for in-person and online retail, but a complex web of factors behind each transaction drives up the cost.
Understanding this flow helps explain why card processing consumes a larger portion of your margin.
The Layers Behind Every Card Payment
When a customer pays by card, here’s what happens:
- The payment terminal or online gateway sends an authorization request to the card network (e.g., Visa, Mastercard).
- The network routes the request to the customer’s issuing bank.
- The bank approves or declines the transaction, sending an authorization code.
- If approved, the funds are held on the customer’s card, and the transaction is settled, often by the next business day.
- Each party, issuing bank, card network, or payment processor, takes a percentage-based fee from your payment.
This chain creates a “cost pyramid.” Not only do you pay a processing fee (typically 1.5 to 3.5 percent), but you might also face assessment fees, network fees, and possible monthly minimums or statement fees from your merchant provider.
Credit card payments are authorized instantly, and funds typically reach your account within one business day, making them highly popular for businesses that value speed of cash flow and customer flexibility.
| Step |
Party Involved |
Typical Fee or Risk |
| Authorization |
Payment gateway, network |
$0.10–$0.30 per transaction |
| Settlement |
Issuer, network, processor |
1.5–3.5 percent of the transaction |
| Dispute/Chargeback |
Issuer, cardholder |
Up to $25–$40 per dispute |
Why do some card transactions cost more than others?
Fees can vary by card type (rewards cards typically incur higher costs), business type (higher-risk categories may result in additional fees), and whether the transaction is in-person or online. Premium cards, also known as business cards, generally have higher interchange rates.
Crunching the Costs: Fee Differences
Let’s get into the heart of the matter: what each payment method really costs you. The difference becomes dramatic as your transaction amounts climb.
ACH vs Credit Card: The Fee Showdown
With ACH, you typically pay a flat fee, often less than $1 per transaction, regardless of the payment amount. With credit cards, your cost is a percentage of every payment, so the fee grows with your transaction amount.
| Transaction Amount |
ACH Cost (Flat Fee) |
Credit Card Cost (2.9 percent) |
Savings with ACH |
| $100 |
$1 |
$2.90 |
$1.90 |
| $1,000 |
$1 |
$29 |
$28 |
| $10,000 |
$1 |
$290 |
$289 |
According to Visa’s published U.S. interchange schedules, many categories fall between 1.15% and 1.75% plus $0.05 and $0.20 per transaction, with higher rates applying to certain premium or rewards products. This structure means that your processing expense rises as the payment size increases, unlike ACH, where the fee often stays flat.
This is why ACH becomes a no-brainer for larger or recurring payments; your costs are predictable and far lower.
Speed, Cash Flow, and Risk
Cost is crucial, but the timing and risk around each payment method can affect your day-to-day operations just as much.
Settlement Times and Managing Risk
Credit cards settle quickly,
usually within one business day. This helps you maintain a steady cash flow, allowing you to pay vendors, make payroll, or reinvest in growth without delay. However, card payments are subject to “chargebacks,” where a customer disputes a fee and the funds are refunded, often tying up your cash.
ACH payments typically take one to three business days, although same-day ACH is becoming increasingly available. The upside? ACH transactions come with fewer refund risks, and “returns” (the ACH equivalent of a failed payment) are less common and more predictable than credit card chargebacks.
What’s the typical chargeback rate for cards vs. returns for ACH?
Credit card chargebacks can range from 0.5 to 1 percent of transactions for many industries, but are higher for those considered risky. ACH returns are less frequent, typically occurring at a rate of less than 0.5 percent, especially when account data and authorizations are properly managed.
Security and Dispute Handling
Payment security and dispute resolution are crucial for maintaining your reputation and ensuring a strong bottom line. Both
ACH and credit cards have built-in protections, but the way they handle problems is different.
How Each Method Handles Disputes and Fraud
Credit card chargebacks happen when a customer disputes a transaction, usually claiming fraud or dissatisfaction. The funds are often automatically withdrawn from your account, and resolving the dispute can take weeks, sometimes with additional fees. Too many chargebacks can even risk your merchant account status.
ACH returns are triggered by insufficient funds, incorrect info, or a customer disputing the withdrawal. However, these are less frequent and follow a predictable resolution process.
According to the Consumer Financial Protection Bureau’s Regulation E, consumers have up to 60 days to report unauthorized ACH debits, providing a transparent and standardized dispute window that reduces uncertainty for businesses.
There’s less immediate risk of lost funds or negative account impact if you stay compliant.
Both payment methods require careful management of customer information and authorization. 2Accept gives you tools to authenticate every payment, monitor for suspicious activity, and respond quickly to any disputes or fraud alerts.
How does 2Accept help me reduce fraud risk with ACH and cards?
2Accept uses multi-layered security, including account validation, real-time monitoring, and customer authorization protocols. Our support team guides you through best practices, enabling you to accept payments and protect your business confidently.
Best Use Cases: When ACH Wins, When Cards Win
The proper payment method often depends on your transaction type, customer expectations, and business model. Here’s how to decide:
Matching Payment Methods to Your Business
- ACH: Ideal for recurring billing, high-value invoices, B2B transactions, tuition payments, membership dues, and SaaS subscriptions. Savings scale up with transaction size.
- Credit Cards: Best for point-of-sale, e-commerce, retail, one-time purchases, and customer segments that expect card rewards or need instant gratification.
According to the Federal Reserve’s 2022 Payments Study, ACH transfers accounted for over 90% of the growth in non-cash payment value between 2018 and 2021, reaching $91.85 trillion, or about 72% of total payment value, while card payments grew steadily, reaching $9.43 trillion or around 7% of volume. This gap highlights why ACH is the natural fit for high-value, recurring, and B2B payments, where efficiency and scale are most crucial. In contrast, cards remain dominant in lower-value, consumer-driven transactions, where convenience and rewards drive behavior.
Can I automatically steer customers to the lowest-cost payment option?
Yes, 2Accept gives you flexible controls to recommend ACH for larger payments, while still offering cards for convenience, so you can maximize savings without limiting customer choice.
How 2Accept Makes It Work for You
It shouldn’t be complicated to accept payments, keep your customers happy, and boost your margins simultaneously. That’s why 2Accept is designed for flexibility, ease of use, and transparency so that you can run your business your way.
Integrated Payments, Fast Setup, and Real Support
- Fast onboarding: Most businesses are ready to accept both ACH and credit card payments within 48 hours, with no complicated code or IT headaches.
- Clear analytics: Your dashboard displays fee breakdowns, transaction history, and savings in real-time, so you always know where you stand.
- Seamless experience: Accept payments online, in person, or by invoice, with one easy-to-use interface and hands-on support.
- Dedicated experts: Our US-based support team is ready to help, by phone, email, or chat, so you’re never left in the dark.
Accept isn’t just about cutting costs; it’s about giving your business the payment flexibility it needs to thrive, now and as it grows.
Ready to Save More? Make the Switch with 2Accept
When you understand the true cost and impact of payment rails, you can make more informed decisions for your business. ACH and credit cards both have their place, and with the proper setup, you can cut costs without sacrificing sales.
2Accept is your partner in optimizing payment acceptance, reducing fees, speeding up funding, and keeping your operation running smoothly. If you’re ready to start saving more on every transaction,
talk to our 2Accept payment expert today and see how much you could keep in your business.
Frequently Asked Questions
1. Can I pass ACH or credit card fees on to my customers?
Depending on your state laws and card network rules, you can surcharge credit card transactions or offer an ACH payment discount. 2Accept can guide you through the compliance requirements so you stay customer-friendly and legal.
2. Is there a minimum or maximum transaction amount for ACH or cards?
ACH is best suited for larger transactions, but can also be used for smaller ones. Both ACH and card processors may set minimums or maximums for fraud prevention or regulatory reasons. Please review your merchant agreement or contact our support team for the details that apply to your business.
3. How do I reduce the risk of ACH returns or card chargebacks?
Keep your customer data accurate, use secure payment links, and always obtain explicit customer authorization. 2Accept offers built-in tools and proactive alerts to help you avoid both chargebacks and returns.
4. What if a customer wants to switch from card to ACH payments?
Switching is seamless with 2Accept. Customers can update their preferred payment method at any time, and the update will be reflected instantly. This makes it easy to nudge high-value or recurring payers toward ACH, maximizing your savings.
5. How quickly can I start accepting both ACH and card payments?
Most businesses are fully set up and processing payments within 48 hours: no custom code or lengthy integration, just straightforward onboarding from real payment experts.
