ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: ACH Could Become A Growing Trend

Tuesday, November 25, 2008

ACH Could Become A Growing Trend

Interchange has taken fire from all sides in recent years. Merchants, retail organizations, as well federal and state regulatory agencies have all questioned the ethics of interchange. Just as a reminder, interchange is the cost that Visa and MasterCard assesses for using their information highway to complete a credit card transaction. The days of Visa & MC’s “This is how we do it!” thought process might be nearing an end. Both mega giants have employed fear tactics in believing that electronic fraud is on the rise, therefore justifying the ever-increasing cost of using their infrastructure. Legislators and the merchant public at large are receiving highly conflicting reports as to whether there is truth to these statements. In my opinion, the only reason that the 2 mega giants charge interchange to merchants is because they can.

ACH (Automated Clearing House) as a whole is a substantially cheaper cost per transaction. Like checks, ACH is processed at a fixed cost. What’s the hurdle you ask? Getting cardholders and merchants to switch over to this mindset. The bankcard industry is deeply entrenched and will take time and deep advertising pockets to get it dethroned. It’s still many years down the road before ACH can compete with the brand popularity of the super giants, but I have high hopes.

Southern lending Solutions

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