Could ACH be a viable payment network for in-person retail purchases?
Answer by Dion Lisle:
Let me add a few points to Gus's well thought out answer:
– Fraud – no one thinks of ACH fraud, but it is over $2 billion annually in the US. Compared to $13 billion Credit and Debit card fraud.
– Consumer protection – using a credit card is far more secure due to the legal and systemic protections built into the system. Worst case example, if your ACH data (bank account and routing) is stolen and used improperly it would take some time and effort to recover those funds depleted from your account.
– User experience – the above described user experience is….sub-optimal at best.
A final note of clarification is that ACH systems are not real-time, so settlement takes 1-2 days, legally allowed up to 3 days and weekends don't count. So from a merchant perspective that introduces some risk. The cost of ACH is so low it might be worth it though it is pennies per transaction.