ACH or card, and the invoice size where it stops being close.
Card fees are a percentage with no ceiling. ACH fees are typically a percentage with a cap of $5 to $10. Above a few hundred dollars that cap is the whole comparison, and most businesses never offer the option.
What this page settles.
Three questions, in the order most people ask them.
The arithmetic
This is one of the few topics in payments where the comparison is genuinely simple.
Card fees are a percentage with no ceiling. 2.9% of $5,000 is $145. 2.9% of $20,000 is $580.
ACH fees are typically a percentage with a cap. Published examples: Stripe at 0.8% capped at $5.00, Helcim at 0.5% + 25¢ capped at $6, Stax at 1% capped at $10, PayPal’s Pay by Bank at 1% capped at $10.00, Square’s ACH via invoice at 1% with a $1 minimum.
So the two lines diverge at exactly the point where the cap bites. At 1% capped at $10, the cap applies above $1,000 — and from there, every additional dollar you invoice costs you nothing more to collect.
| Invoice | Card at 2.9% | ACH at 1%, $10 cap |
|---|---|---|
| $100 | $2.90 | $1.00 |
| $500 | $14.50 | $5.00 |
| $1,000 | $29.00 | $10.00 |
| $5,000 | $145.00 | $10.00 |
| $20,000 | $580.00 | $10.00 |
A business collecting ten $5,000 invoices a month is paying $1,450 on cards and $100 on ACH. That is $16,200 a year, and it is usually the largest single saving available to any business that invoices.
What ACH actually is
ACH — Automated Clearing House — is the US bank-to-bank transfer network. Direct debits, direct deposits, payroll, most recurring bills.
For a merchant, taking an ACH payment means collecting the customer’s bank account and routing numbers once, usually through a secure hosted form or a bank-linking service, and then debiting the account. The customer authorises it; you do not hold the details any more than you hold a card number, provided your provider tokenizes properly. Tokenization and P2PE.
It is slower than a card and it is not instant authorisation. A card tells you yes or no in two seconds; an ACH debit tells you a few days later if it bounced. That difference is real and it is the main reason businesses keep taking cards.
Where ACH wins
Invoices above roughly $500 to $1,000. The cap makes the comparison one-sided. If you invoice other businesses, this is the single highest-value change available to you. B2B processing.
Recurring billing of significant amounts. Rent, retainers, memberships at real monthly values, service contracts. No expiry date to lapse, no reissued card to chase, no account updater needed — the bank account number changes far less often than a card does. For a subscription business this also removes a chunk of involuntary churn. Subscription pricing.
Any business where the customer is also a business. Business customers are used to paying by bank transfer, frequently prefer it, and often have a procurement process that handles it more easily than a card.
Deposits and progress payments on large jobs. Contractors, fabricators, anyone invoicing in stages.
Where cards win
Small amounts. On a $40 sale the difference is about a dollar, and the card is instant.
Anything at a counter. ACH is not a point-of-sale method.
When you need to know now. A card authorisation is a near-immediate answer on whether funds are available. ACH is not — you learn about a failure days later, after you may have delivered.
Consumers who will not do it. Plenty of consumers are uncomfortable handing over bank details and comfortable handing over a card, and a payment method the customer will not use collects nothing.
When speed of funding matters to you. Card funding is typically one to two business days; standard ACH takes longer. Funding times.
The three reasons people take the card anyway
Worth being honest about, because “just offer ACH” is advice that ignores why it is not already universal.
The customer prefers the card. Frequently because they want the rewards points, which on a $20,000 invoice is a meaningful personal benefit paid for by you. This is a negotiation, not a technical problem, and the usual answer is to offer the ACH option prominently and let the customer choose.
You need the money sooner, or you need to know immediately that it cleared.
Nobody set it up. This is the most common reason by a distance. ACH is a feature your provider either offers or does not, it needs enabling, and it needs to appear on your invoices as an option. A business that has never configured it does not have the choice, and will not until someone spends an hour on it.
How to actually offer it
Check your provider’s published ACH rate and cap. Most of the major providers publish one; the caps vary from $5 to $10 and the percentages from 0.5% to 1%. On large invoices the cap matters more than the percentage.
Put it on the invoice as the first option, not buried. Most customers take the default.
Consider making it the only option above a threshold. Plenty of B2B sellers do not accept cards above a stated amount, and say so on the invoice. That is a commercial decision rather than a rule, and it is common enough not to be remarkable.
Know the return rules. ACH debits can be returned — insufficient funds, closed account, unauthorised — and returns carry fees. Consumer debits have a longer reversal window than business ones. For a business invoicing other businesses this is usually a minor issue; for consumer-facing recurring billing it is worth understanding before you move volume. NSF and ACH reject fees.
Do not drop cards entirely unless your customers are entirely businesses. Offering both and defaulting to ACH captures most of the saving without losing anyone.
What we charge
Interchange + 0.50% + 10¢ in person, interchange + 0.75% + 25¢ keyed, with no contract, no monthly fee and no monthly minimum, and ACH available on the account.
If a real share of your revenue arrives as invoices over $1,000, this is probably a bigger number for you than anything else on this site. Send us a statement and we will work out what moving that volume to ACH would actually save.
While we are on the subject
Is ACH cheaper than a card?
On anything above a few hundred dollars, dramatically — because ACH fees are usually capped and card fees are not. On small amounts the difference is pennies.
How long does ACH take to clear?
Typically a few business days, against one to two for a card. Same-day ACH exists and costs more. That delay is the main reason businesses still take cards.
Can ACH payments be reversed?
Yes. Returns and disputes exist and have their own timescales and fees, and consumer ACH debits carry a longer reversal window than most people expect.
Do my customers need to do anything special?
They provide bank details once, usually through a secure link, and can then be charged again. Many business customers prefer it to handing over a card.