Why ACH is Becoming a Smarter Choice Over Credit Cards

Credit Card Fraud is Rising—Is It Time to Rethink How We Pay and Receive Payments? 

Warren Buffett, one of the most respected investors in history, has a straightforward piece of financial advice: before investing, pay off your credit card debt. As he put it, “I can’t make 18% return”—a reference to the high interest rates many credit card holders face. With credit card fraud on the rise and annual percentage rates (APRs) soaring past 22%, consumers and businesses alike are looking for safer, smarter payment options.

Beyond APRs, consumers are also growing increasingly dissatisfied with credit card rewards programs. A recent Consumer Financial Protection Bureau (CFPB) report highlights growing frustration with the lack of transparency and devaluation of credit card rewards. Similarly, PYMNTS reports a dramatic increase in complaints about card rewards, with consumers struggling to redeem points for meaningful rewards.

With fewer benefits and high costs associated with credit cards, consumers are beginning to explore alternative payment methods (APMs). One such method—Automated Clearing House (ACH) payments—is emerging as a preferred choice for managing personal finances.

The Rise of ACH Payments

ACH payments have long been a backbone of direct deposits and bill payments, but their adoption in everyday transactions is gaining momentum. In 2024, Same Day ACH payment volume topped the 1 billion mark, with more than 1.2 billion payments for the year. The value of those payments was $3.2 trillion. With ACH transaction volumes steadily increasing, it’s worth considering how this payment method benefits consumers compared to credit cards.

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In 2024, Same Day ACH payment volume topped the 1 billion mark, with more than 1.2 billion payments for the year. The value of those payments was $3.2 trillion.

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Lower Costs & No Interest Fees
Unlike credit cards, which charge merchants high processing fees that often get passed onto consumers through higher prices, ACH transactions have significantly lower processing costs. Additionally, ACH payments draw directly from bank accounts, eliminating the risk of accumulating debt and interest charges.

Increased Security & Fraud Protection
ACH payments are inherently more secure than traditional credit card transactions. Since ACH transactions occur bank-to-bank, they bypass many of the vulnerabilities associated with paper checks or card-based fraud. In 2022, check fraud incidents rose 94% year-over-year, making ACH an even more appealing alternative for consumers looking for security in their transactions.

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In 2022, check fraud incidents rose 94% year-over-year, making ACH an even more appealing alternative for consumers looking for security in their transactions.

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Reliable for Recurring Payments
For subscription-based services or monthly bills, ACH payments offer a seamless experience. Unlike credit cards, which may require frequent updates due to expired cards or fraud-related replacements, ACH-linked payments remain stable and uninterrupted. This ensures on-time payments and greater convenience for both consumers and merchants.

Consumer Preference & Growing Adoption
Consumers have become accustomed to ACH payments for direct deposits and recurring bill payments, and they’re now expecting this option in more areas, including online shopping and in-store purchases. With the rise of real-time payments and evolving digital payment technologies, ACH is poised to play a bigger role in the future of consumer spending.

Operational Efficiency
ACH enhances operational efficiency for businesses by offering greater control over cash flow. With ACH, organizations gain increased visibility into their financial transactions, ensuring they can track incoming and outgoing payments with ease. This improved transparency leads to better bookkeeping accuracy, reducing the chances of errors and discrepancies. Additionally, ACH helps businesses improve their financial forecasting, allowing for more precise planning and decision-making. By streamlining payment processes, ACH enables organizations to focus on growth while maintaining financial control.

A Shift Toward Smarter Payment Choices

As credit card rewards lose their luster and high interest rates continue to burden consumers, ACH payments provide a compelling alternative. Lower costs, stronger security, and ease of use make ACH a smart choice for those looking to improve their financial health. With increasing ACH adoption, it’s time for both consumers and businesses to rethink their payment preferences and take advantage of the benefits ACH offers.

Where ValidiFI Comes In

As businesses and consumers navigate this shift, having the right tools in place is critical. As a Nacha preferred partner, ValidiFI offers data-driven bank account validation solutions that enhance ACH payment efficiency, reduce fraud, and improve transaction reliability. By leveraging predictive bank account and payment intelligence, ValidiFI helps businesses seamlessly integrate ACH payments, in compliance with Nacha rules and regulations, while optimizing customer experiences.

Is it time to reconsider outdated payment methods that leave your business vulnerable to fraud? Ready to explore how ACH can offer stronger security, lower costs, and greater reliability? Learn more about how ValidiFI can support your payment strategies today.