ACH or card? How to choose payment methods for your software

How each works

A card payment runs on the card networks between two banks: the issuer, which issued the card and approves or declines the payment while the cardholder waits, and the acquirer, the bank on the merchant’s side. The acquirer or a payment facilitator then pays the merchant, net of fees, on the schedule in its contract. The timelines below show each stage.

An ACH payment is an instruction to move money between two US bank accounts over the ACH Network, and it works in one of two directions. An ACH credit pushes money from the Originator, the party that starts the payment, to the Receiver. An ACH debit pulls money from the Receiver’s account into the Originator’s account.

Payroll direct deposit is a credit. A payer who pays a bill or an invoice from a bank account inside your software is usually making a debit. When your customers collect money through your software, they are usually pulling it with a debit, so this guide compares card payments with ACH debits. Our guide to how ACH payments work covers the parties and the batches in more detail.

Two networks, two timelines

A card payment and an ACH payment pass through different stages on different networks. On both, settle means money moving between banks.

What each costs

Card costs start with interchange, a fee set by the card network and paid between banks: the acquirer pays it to the card issuer. Merchants don’t pay interchange directly. They pay a merchant discount to their own bank, which bundles interchange with other fees and is typically a percentage of each transaction.

Interchange varies with the card product, the channel and the merchant’s segment. Card-not-present payments, the kind your customers take online or inside your software, carry more fraud risk and higher interchange than payments where the card is present.

Debit cards also have a federal ceiling. As of October 2026, the Regulation II cap on debit interchange is still 21 cents + 0.05% of the transaction, plus a 1-cent fraud-prevention adjustment. It applies to debit card issuers with $10 billion or more in assets and has not changed since October 1, 2011. For debit cards from smaller, exempt issuers, Visa’s April 2026 US schedule lists 0.80% + $0.15 for a card-present retail payment and 1.65% + $0.15 for a card-not-present one.

AFP’s 2022 survey (via the Cleveland Fed, 2026) found median ACH costs of $0.25 to $0.50 per payment for each side, versus 2.0% to 2.5% of the payment for a business receiving a credit card. Provider pricing varies, and we don’t publish ours here.

That is the core of ACH vs credit card fees: in the benchmark, the card figure is a percentage of the payment and the ACH figure is not, so the dollar difference between them grows with the size of the payment. Our guides to credit card processing fees and ACH processing fees break down what drives each cost.

One federal rule affects how merchants price card payments. As of October 2026, federal law (the Electronic Fund Transfer Act, as amended by Dodd-Frank) lets merchants offer a discount for paying by cash, check, debit card or credit card, and card networks can’t stop them. The same law lets merchants set a minimum of up to $10 for credit card purchases. It protects discounts and does not create a right to surcharge. This is not legal advice.

Speed and certainty

A card payment gives the payer an answer at checkout. The issuer approves or declines in seconds, so your software knows right away whether the payment was approved, and a payer whose card is declined can try another method while still on the screen.

An ACH payment gives no equivalent answer at checkout. Your software submits the payment, the entry is sent in a batch, and it settles between banks on a set date. As of October 2026, Nacha, which writes the ACH rules, lets an ACH debit settle only the same day or the next banking day, while an ACH credit can settle the same day, the next banking day or two banking days later.

Settlement is not the end of an ACH payment. Most returns, such as insufficient funds or a closed account, must reach the Originator’s bank (the ODFI) by the opening of business on the second banking day after the settlement date. Unauthorized debits from consumer accounts can come back later still, as the next section shows.

For your software, that means an ACH payment needs at least three visible states: submitted, settled and returned. A card payment needs its own: approved, declined and, later, disputed.

“Settle” has a narrow meaning for both methods: money moving between banks. When your customers receive funds is a separate step set by their provider’s funding schedule, so don’t promise payers or payees a date based on settlement alone.

Disputes and returns

Cardholders dispute a payment through their card issuer. Under Visa’s rules as of October 2026, an issuer generally has 120 days from the transaction’s processing date to raise a dispute. For some dispute types the clock runs from the date the goods or services were expected instead, but never beyond 540 days from processing.

Under Visa’s rules, the acquirer generally has 30 calendar days from the dispute’s processing date to act on it, and acquirers often set shorter internal deadlines for their merchants.

ACH has returns instead of chargebacks, and they follow Nacha rules rather than card network rules. As of October 2026, an unauthorized debit from a consumer account can be returned for 60 calendar days. An unauthorized debit from a business account, return code R29, has a two-banking-day window.

That difference matters if your customers bill both consumers and businesses. A business payer has a short window to object to a debit, a consumer has about two months, and a Visa cardholder generally has about four. Our guide to chargebacks vs ACH returns compares the two processes in more detail.

Risk thresholds

Card networks and Nacha both track how often a business’s payments come back, and both measure it as a rate.

On the ACH side, as of October 2026, Nacha’s unauthorized return rate threshold is 0.5% of debit entries. It counts returns coded R05, R07, R10, R11, R29 and R51.

On the card side, as of October 2026, Visa’s Acquirer Monitoring Program (VAMP) treats a US merchant as excessive when its VAMP ratio is 1.5% or more and it has 1,500 or more fraud reports and disputes combined in a month. Until March 31, 2026, the ratio threshold was 2.2%. Visa’s fact sheet does not publish the fees for merchants over the line, so confirm them with your acquirer.

Both measures turn on payments that payers dispute, report as fraud or say they never authorized. So how your software collects the payer’s authorization and describes each payment matters on both methods.

How the US pays

Federal Reserve data shows how differently the two methods are used. The Federal Reserve Payments Study, released July 1, 2026, counted 236.6 billion noncash payments in the US in 2024. Cards made up over three-quarters of those payments by number. ACH made up almost three-quarters by value, the first time its share reached that level.

Consumers lean on cards for everyday spending. In the Fed’s 2026 Diary of Consumer Payment Choice, consumers made 47 payments a month in 2025, mostly by credit and debit card, and about 37% of those payments were remote rather than in person.

Business-to-business payments have shifted toward ACH. If your customers are weighing ACH or credit card for business payments, start with the numbers: a Federal Reserve Bank of Cleveland brief published September 21, 2026 found that ACH was 41% of business-to-business payments by number in 2024, up from 25% in 2015, and has ranked first since 2020. Checks fell to 13%, from 32%.

Read together, the numbers fit how the two methods work: cards for frequent everyday payments, ACH for fewer, larger transfers such as payroll, bills and business payments.

When offering both makes sense

Offering both turns bank payment vs card payment into the payer’s choice, one payment at a time. The decision usually comes down to a few questions about your customers and the people who pay them.

• Do payment sizes vary widely? Large bills are where the cost gap described above matters most.
• Do some payments need an answer now? Deposits, bookings and same-visit charges need the instant answer a card gives.
• Are the payers consumers, businesses or both? ACH return windows differ for each, as shown above.
• Do your customers bill on a schedule? Rent, tuition and invoices often come from the same payer each time, which suits an ACH debit the payer has authorized.
• Do some payers pay only once? A one-time payer often has a card ready but not their bank details.

Offering both does not mean treating them the same. Show a bank payment as submitted, not confirmed, at checkout, and keep its return window in mind after it settles.