Posted by NationalACH on Jan 05, 2012

Pricing for ACH Processing

This article discusses the elements that are considered when setting rates for ACH processing. Rates for ACH payment processing are based on three main factors. 

  • Industry Classification
  • Monthly Processing Volumes
  • Customer Authorization

High Risk vs. Standard Risk

Companies classified as high risk merchants classification have a different rate structure than low or standard risk accounts.  As one would expect, high risk ACH processing carries higher rates than standard risk processing.

 High risk ACH is associated with greater risk of contingent liabilities for processors.  These include a statistically greater likelihood higher revokes (chargebacks) and increased numbers of returns associated with high risk processing.

High risk ACH processing usually has a discount rate assessed as well as a per transaction fee. Standard risk ACH payments are generally priced at a flat rate per transaction.  

Monthly Processing Volumes

Companies processing higher volumes of transactions per month generally have lower rates than smaller accounts. This is not surprising.

Across industry, larger accounts have lower pricing. ACH processors often offer price breaks based on reaching monthly thresholds. Tiered pricing is common for large accounts, with rates lowered at as you move to higher volumes.

Customer Authorization

The way in which you obtain authorization from your customers can impact your rates. The lowest rates are associated with a written authorization from the customers.

When you accept checks online or check by phone orders, rates are higher. This is easy to understand.

There is a greater risk for revoked or returned transactions when the customer is authorizing the transaction online or on the phone. The consumer can later claim the payment was not authorized.  

There are ways to offset risk if written authorization is not obtained.  

For check by phone orders, record the payment authorization where the customer verbally agrees to the payment. Voice prints are as unique as finger prints.  Of course, voice recordings are helpful only if the buyer is the same person associated with the bank account. 

For online orders, identity verification adds a layer of protection.  Identity verification services are an inexpensive way to protect against fraud.  And you can require a digital signature from buyers to further reduce risk.

Additional Factors Affecting ACH Processing Rates

While transaction fees and discount rates are the biggest part of ACH processing rates, there are other elements to when looking at pricing.  These include:

  • Returns for non-sufficient funds (NSF) or bounced checks
  • Returns for unauthorized transactions (consumer revokes the transaction)
  • Monthly account or gateway fee
  • Optional advanced account verification services.  For example, early warning verification uses a variety of negative and positive databases to verify the account is open, has no bad checks written against it, and has money in it (although it does not “freeze” the funds for a particular transaction)
  • Some processors also assess a one-time software license fee or account setup fee


ACH processing expands your ability to collect payments. The more ways customers can pay you, the more money you make.

Understanding the way rates are set is helpful as you apply for ACH processing accounts. And can help you lower rates as you build history with your ACH processor.  

Are you interested in ACH processing to increase your business profits?

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