News & Resources

ACH cards a better option for retailers suing credit card firms

Jun 10, 2013 Sean Albert

Several American retail outlets recently filled a lawsuit against Visa and MasterCard regarding processing fees that they allege were inflated.

Reuters reported that the retail group that includes Macy's and Target filed a lawsuit against the two credit card giants at the United States District Court in Manhattan, New York, recently. It negates a previous settlement that millions of retail outlets reached with the payment processing companies that would have seen the sellers pay $7.2 billion in fees, according to the source.

After the settlement was announced last April, many companies condemned the measure, saying that it protected Visa and MasterCard. However, after choosing to opt out of the settlement, the retailers can pursue their own litigation against the credit organizations.

According to Digital Transactions, businesses have been turning to the use of ACH cards as an alternative to credit cards. Many have been put off by the high processing fees levied by credit companies.

For most, ACH payments offer a much cheaper alternative to traditional credit. The source stated that ACH fees are typically between $0.05 and $0.07 per transaction. On the other hand, credit card fees can cost between $0.24 and $0.27 for every purchase a consumer makes.