ACH payments are safe and secure because they’re guaranteed to go through once the process is completed. There’s also a low rate of ACH fraud, especially when compared with credit card transactions. The recipient will need an American bank account for this type of transaction so law enforcement finds them if anything illegal occurs (such as theft). 

 An ACH transfer is a bank-to-bank, electronic money transfer processed through the Automated Clearing House (ACH) Network. The ACH Network is a batch processing system, and banks and other financial institutions use the network to aggregate ACH transactions for processing three times every business day. The ACH Network processes two kinds of ACH payments: direct deposits and direct payments. 

Pros of Payment Processing With ACH Payments 

In general, sending money via ACH is more secure than other methods. As a result of the ACH Network being fully automated, all banking information must be verified and authorized before the transaction can be processed. They must also abide by the Operating Rules. 

A payment processor, payment gateway, or digital wallet can all accept ACH payments. Using a payment gateway ensures the security of both the payment transaction and the third-party payment processor. 

Setting up ACH billing is a cinch. With ACH billing, funds are transferred automatically to pay bills, save, or put away for retirement. 

Cons of Payment Processing With ACH Payments 

Only certain types of payments are eligible for ACH payment processing. An ACH transfer requires both parties’ banking information (e.g., account number, routing number) to be provided to the financial institutions involved in the transaction (i.e., for the transfer of funds). 

As a result, it is common to set up ACH transactions as recurring payments rather than one-time purchases. You’ll need a payment gateway if you want to make one-time payments with an ACH debit card. 

Paying by ACH debit also takes some time. Once the ACH Network has processed this payment, the financial institution withholds the funds until verified, which may take a few days. A credit card transaction, wire transfer, or sending money to a debit card makes money available to the recipient right away. 

Processing an ACH transaction involving international funds can be complicated. Funds must be converted to US dollars first because The ACH Network processes transactions domestically.  

Pros of Payment Processing With Credit Card 

Most businesses widely accept credit cards, even small ones, which makes processing a credit card transaction a net positive in most cases. If you want to use a credit card to pay for something, it doesn’t matter who or where you are shopping. 

International payments are made much easier with credit card payments. Even though credit cards charge a small fee to process international transactions, they save you the trouble of trying to convert your money into the appropriate one. 

You can pay for something even if the money isn’t in your checking account when using a credit card. The interest you pay is like paying a fee to let the transaction go through when you use a credit card. After that, you’ll owe the credit card company the money you borrowed plus interest. 

With a credit card, you can make a one-time payment as well as recurring monthly bills. 

Cons of Payment Processing With Credit Card 

Credit card processing takes anywhere from 24 hours to three days to appear in a merchant account. ACH payments take about the same amount of time to process as credit card payments, but debit card payments take longer. 

As a result of things like credit card fraud, credit cards typically pose a greater risk. When compared to other forms of financial fraud, such as automated clearing house (ACH) fraud or wire transfer fraud, credit card fraud is by far the most common. Malicious actors can exploit a weak network and obtain private credit card information because more merchants accept credit cards as payment methods. 

Credit card ownership, in general, is riskier because the cardholder may owe money to their creditor and be in arrears. Additionally, accepting credit card payments carries a higher risk than other forms of payment, so the recipient pays more when paying with a credit card. 

Because the credit card company takes a percentage of every sale, credit cards generally become more expensive for both the user and the recipient. 

 How Safe Is an ACH Payment? 

Writing a paper check is less secure than using ACH payment options. Starting with the fact that, as contactless payment, you only have to enter your bank account information one time to set up an automated clearing house (ACH) electronic network. If you use paper checks, you reveal your bank information with each check you write for bank payments. 

Also, a check can be stolen or misplaced and susceptible to fraudulent transactions. Automated Clearing House accurate payments transfer money directly from your bank account to the recipient’s bank account without any additional processing steps required. 

If victimized by fraud or ACH errors, federal law protects you. The only catch is that you must notify your bank within sixty days if you encounter any issues with the transfer of funds. 

Also, unlike wire transfers, the automated payment process of ACHs is reversible and immediate, making them a preferred payment method. It’s not prone to suspicious transactions and has a significant level of fraud protection. A thief will find it more difficult to steal your money and flee. 

Because the recipient of the funds typically has to have an American bank account, using an ACH payment is safer than using some money transfer services. Giving enough identification means that if fraud or other illegal activity is involved, authorities will locate the recipients quickly. 

Security Differences Between ACH Payment and Credit Card Transactions 

ACH payments have a higher level of security than credit card transactions because of the guarantee of payment. 

It will take several days before the transaction is approved, even if the ACH transaction is guaranteed to go through. An ACH transaction is a request for payment from a financial institution. 

While the issuing bank approves a debit card, the credit card network (such as Visa and Mastercard) approves a credit card. Funds are released as a “guaranteed funds” transaction once approved (which takes almost no time). 

On the other hand, paying by ACH payment poses a lower security risk because ACH banking information is more challenging to obtain than credit card numbers. 

Although ACH fraud does happen, it is infrequent due to the lengthy authorization process that the ACH network undergoes. When a request was submitted incorrectly or with inaccurate banking information, a return code is issued. 

One of the most common types of financial fraud is credit card fraud, which affects the cardholder, the creditor, and anyone involved in the transaction. A Credit Card Purchase Protection Agreement (CCPPA) protects most credit card companies. 

Buyers and merchants alike can benefit from this protection, typically funded through annual fees and high-interest rates. Because of this agreement, credit card companies work hard to keep a credit card secure, resolve compromised funds, and reissue a new card. 

Since 1974, the Federal Reserve Bank and the Electronic Fund Transfer Act, continue to regulate ACH transactions. Beyond that, every transaction must follow the rules established by the NACHA, the Electronic Payment Association. So, at the onset, ACH is regulated and a safe way to pay. 

BNG Payments is payment processing made easy. Whatever your processing needs, we make it easy for merchants to accept credit and debit cards, mobile payments, e-commerce, and more. Contact us to find out more about what BNG Payments can do for your business.