Why are technology fees different for ACH and credit card payments?
Read below to learn why credit card technology fees differ from ACH technology fees.
ACH technology fees
ACH (Automated Clearing House) transactions is an electronic fund transfers between bank accounts. ACH transfers are a secure and cost-effective way to move money between financial institutions. An ACH transfer is often processed in batches rather than in real-time.
Settlement status is not a final status and does not guarantee funds have cleared.
ACH transfers offer lower processing cost because the Nacha network does not provide the same risk protections and immediacy of funds offered by the card brand networks.
Credit Card technology fees
When a credit card is used to make purchases, authorized transactions are confirmed in real-time. During the authorization period the card brands and schemes confirm cardholder information is accurate, and that sufficient credit limit is available to complete a sales transaction. These transactional services are passed to merchants and payment processors in the form of interchange and scheme fees. Included in interchange is the cost to maintain the card network and protect cardholders from fraudulent activity. At AndDone, sub merchants are charged a processing fee based on a percentage of a sales transaction to cover the cost of interchange and scheme fees.
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