ACH(Automated clearing house) transactions are electronic payments sent from one bank account to another. They are typically used for direct deposits and online bill payments. Credit cards, on the other hand, are accounts that allow you to borrow funds on a short-term basis in order to make purchases. Credit cards charge interest when you carry a balance and can have annual fees accosted with them. Let us discuss some more difference between ACH Vs Credit Card with the help of the comparison given below.
ACH Vs Credit Card | Difference between ACH and credit card
- The average cost per transaction of ACH is typically $0.26 to $0.25 per transaction, While in credit cards average cost per transaction is typically 2% to 4% of each transaction.
- In ACH transaction settlement timing up to several business days, while in credit card transaction settlement timing is processed immediately.
- Both support international transfers.
- Low incidence of fraud in ACH, While the high incidence of fraud in credit cards.
- 60-day dispute window of the financial institution transmittal of the statement in ACH, but a 60-120 day dispute window, depending on the situation.
- Multiple speed options might be able to combine options to balance cost and risk. While credit cards are only a fast but expensive option.
- ACH usually has the lowest transaction cost of all payment systems, credit cards usually charge 2.5% of the transaction value in fees, plus an additional processing fee.
- ACH can take three or more business days to process the transaction. While credit cards process the transaction within 24 hours to three days of the transaction date.
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