What if the way you’re collecting payments is quietly draining your profits every month? Many businesses use credit card payments for recurring billing, assuming it’s the most efficient choice. But card failures, high processing fees, and hidden churn risks could be costing you more than you realize. If your business depends on subscriptions, memberships, or retainer based clients, it’s time to look at a smarter approach. ACH for recurring payments offers a more stable, lower cost method. Built on the automated clearing house network, ACH can help you protect your revenue, improve cash flow, and give your customers a better payment experience.
The Problem with Credit Cards for Recurring Billing
Recurring billing is a go to for many businesses because it keeps cash flow consistent and reduces manual work. Credit and debit card transactions are convenient, but they’re also fragile. Cards expire. They get canceled. They get replaced without notice. This leads to payment failures that disrupt your payment process, trigger follow ups, and increase customer churn.
Some subscription based businesses see card failure rates as high as 15%, especially in industries with long customer lifecycles. ACH payments avoid these issues by pulling funds directly from a customer’s bank account, which is far less likely to change.
Why ACH Works for Recurring Revenue Models
ACH (Automated Clearing House) is a network that connects banks and credit unions across the United States. It is regulated by NACHA, the National Automated Clearing House Association, which ensures secure and standardized transactions.
In 2023, the Federal Reserve processed 18.9 billion commercial ACH transactions. This shows its growing dominance as a payment method for businesses of all sizes.
Businesses use the ACH network for millions of electronic payments every day, from payroll to mortgage payments. When applied to recurring billing, it creates a direct link between your business and your customer’s bank. Funds are pulled on a consistent basis without the need for invoices, cards, or paper checks. The big benefit of it all? ACH reduces payment failure rates, cuts businesses’ costs, and eliminates the need to chase overdue payments.
Cost Savings that Add Up
One of the most immediate benefits of ACH for recurring payments is the cost reduction. Where credit card payments often come with 2.5 to 3.5 percent processing fees, ACH fees are typically a flat rate of a few cents.
Over time, shifting to ACH for recurring payments can save your company thousands in unnecessary fees, especially if you are charging higher ticket subscriptions or invoicing clients for regular services.
Timing and Its Impact on Cash Flow
ACH is not instant. A standard ACH transaction takes one to three business days. But the exact timing depends on the time of submission and the participating financial institutions. Although not immediate, it is still faster and more reliable than relying on customers to manually send payments or mailing paper checks.
Recurring billing keeps cash flow steady and reduces manual work, but many platforms are built around credit card behavior. Cards authorize and settle within hours, which sets an expectation for customers that ACH does not meet. For example, a customer may approve a debit on the 15th, but if your system misses the submission cutoff or the 15th falls on a Friday, funds might not post until the 18th or 19th.
From the customer’s point of view, that delay can be confusing. If they do not see the transaction when expected, they may assume something went wrong. This often leads to unnecessary support tickets, refund requests, or account holds that could have been avoided.
You can close that gap by aligning your billing automation with your ACH processing timeline. Learning to time your invoices, payment requests, and confirmation emails so your customers always know what to expect creates a more professional experience, reduces confusion, and strengthens trust in your billing process. It’s a small adjustment that makes a big difference for businesses that rely on predictable, recurring revenue.
How to Set Up Recurring ACH Transfers with ECS Payments
Implementing ACH for recurring payments is more straightforward than you might expect. Here is how ECS Payments’ simplified process works:
- Apply for an ACH account online at ecspayments.com
- ECS Payments sets you up with a virtual ACH terminal
- Get customer authorization to pull funds from their bank account ( usually through a digital agreement).
- Collect bank account details, including the routing and account numbers.
- Define the billing schedule, whether monthly, quarterly, or annually.
- Start pulling your set payment amount.
- Use your dashboard to monitor payment status and quickly resolve any issues.
We ensure compliance with NACHA rules and help you maintain transparency throughout the payment process.
ACH Compared to Other Payment Options
| Feature | ACH Transfers | Credit Card Payments | Paper Checks |
| Fees | Low (a few cents) | High (2.5%–3.5%) | High handling cost |
| Failure Rate | Low (bank accounts don’t change or expire) | Moderate to high (15%) | Risk of loss |
| Processing Time | 1 to 3+ business days | Same day | Several days |
| Best For | Recurring billing | One time charges | Manual invoicing |
ECS Payments Makes It Simple and Scalable
Our ACH tools are designed to support businesses that rely on repeatable billing models. Whether you run a subscription service, tuition program, professional practice, or B2B retainers, ECS Payments helps improve retention and simplify operations.
Ready to get started with ACH for recurring payments in your business? Contact our team at ecspayments.com/contact.
Frequently Asked Questions About ACH For Recurring Payments
ACH payments are pulled directly from a customer’s bank account, which makes them more stable than credit card payments. Cards can expire, be canceled, or change frequently. ACH reduces failure rates, helps keep revenue flowing, and lowers your processing costs.
A standard ACH payment typically takes one to three business days to settle. Timing depends on when the payment is submitted and the banks involved.
You’ll need to apply for an ACH account, get customer authorization, and collect their bank account details. ECS Payments provides a virtual terminal, digital agreement tools, and a dashboard to monitor payments and stay compliant with NACHA regulations.
Possibly, if you don’t set expectations. ACH isn’t instant like card payments. ECS helps you align your billing schedule with ACH processing times, and gives you tools to automate confirmation messages, reduce confusion, and create a better customer experience.
