Budgeting
When you get to the payment section of an online registration page or shopping cart, you usually have a handful of options, including credit and debit card companies, PayPal, and ACH. An ACH payment prompts you to fill out your checking or savings account number, plus your bank’s routing number. But is this safe? While you may bypass add-on fees for other options, you’ll also need to consider security regarding ACH vs. debit card or other payment types. We’re here to help you understand the answers to your questions and concerns.
What is ACH?
An ACH transfer is a method of electronically moving funds between accounts at different banks and credit unions that are processed through the Automated Clearing House (ACH) Network.
The ACH Network processes two transaction categories, both of which can be either one-off or recurring:
- ACH credits – Governments and businesses can make ACH direct deposits to individuals, and individuals can utilize online bill pay services at their bank or credit union to pay bills or contribute to outside accounts.
- ACH debits – A person, business, or organization can initiate a direct payment at a third-party or provider site (online purchases, paying bills on the biller’s website, using PayPal, etc.).
In 2023, ACH payments reached 31.45 billion transactions totaling $80.1 trillion, including:
- Direct deposit paychecks from public and private employers
- Social Security and Veterans Administration payments
- Bill payments to insurance companies, utility providers, and other businesses
- Person-to-person transfers through Zelle, Paypal, and other apps
As of 2021, ACH transfers accounted for about 11% of international monetary transactions, compared to 29% debit, 28% credit, 20% cash, and 12% mobile and other.
Are ACH payments safe?
The ACH has been around since 1974, and all transactions are regulated by the Federal Reserve Bank and the Electronic Fund Transfer Act (EFTA). Every transaction must also follow the rules established by the National Automated Clearing House Association (NACHA), an independent organization of banks, credit unions, and payment processing companies.
That said, are ACH payments safe?
In terms of fraud level, yes. NACHA reports that fewer than 0.03% of ACH transactions are disputed by consumers who reject them as unauthorized. But how does this stack up to other payment options?
ACH vs. debit card
How safe are debit cards? Unlike an ACH transaction, which is purely electronic, a debit card is a physical card that has the potential to be viewed, copied, or skimmed when used at brick-and-mortar locations.
The Electronic Fund Transfer Act protects consumers from fraudulent transactions and provides the same coverage for both ACH and debit card transactions. According to WalletHub, consumers must report fraudulent transactions to their bank or credit union within two business days of learning of the loss or theft to have their liability limited to $50. If they report it more than two business days but less than 60 days after they receive their bank statement with the fraudulent charges, their liability is capped at $500.
ACH vs. checks
The Federal Reserve reports that in 2018, over 20 trillion dollars of ACH debit transfers were made across 16.6 billion transactions—exceeding the number of paper check transactions (14.5 billion) for the first time ever.
In addition to greater convenience, electronic payments, including ACH, offer greater security than paper checks. Here’s why: while an ACH transaction requires you to provide your bank account and routing number, that process typically only occurs once.
On the other hand, a paper check provides detailed information every time you hand one over, typically including:
- Checking account number
- Bank name and routing number
- Full legal name
- Home address
Phone number (in some cases)
Instead of directly communicating with your bank electronically, a paper check can pass through many human hands, providing multiple opportunities for identity theft and fraud.
ACH in action with RaiseRight
RaiseRight has helped 50,000+ community groups and nonprofit organizations raise over $800 million. We partner with hundreds of top brands, including Amazon and Walmart, and with every gift card or online purchase, organizations earn up to 20% directly from the brand.
ACH security is important to RaiseRight, as we offer ACH processing that allows fundraising participants to pay for their orders conveniently. When you create a RaiseRight account, you can supply your bank account number and routing number and choose a unique PIN that keeps your account safe when you place gift card orders.
Additionally, we take steps to further protect your information by:
- Encrypting all account data
- Transmitting payment information through secure data links
- Storing information as encrypted data, making it unreadable
With an ACH payment setup, you can save on fees and start fundraising faster—without waiting for a check to clear.
Ready to get started? Ask your organization's fundraising manager for your RaiseRight enrollment code and join for free today.
Not yet earning with RaiseRight? Explore more information on how RaiseRight works or read The RaiseRight Playbook to discover how families can raise $1,000 or more yearly without spending extra cash or time on traditional fundraising campaigns.
