ACH (Direct Debit)
ACH Direct Debit pulls money from a US bank account for one-off or recurring payments. It costs far less than cards but takes days to settle.
Updated October 1, 2026
ACH Direct Debit charges a customer by pulling money from their US bank account instead of their card. ACH stands for Automated Clearing House, the network US banks use to move money between accounts. Businesses use it for subscriptions and large invoices because it costs much less than card processing.
How ACH Direct Debit works
The customer authorizes the merchant to debit their account. They enter a routing and account number, or connect the account through a provider like Plaid. The merchant submits the debit, and the ACH network moves the funds in batches over a few business days. A card authorization takes seconds, so ACH settlement is much slower to confirm.
An ACH debit can still fail after you submit it. The bank can return it days later for insufficient funds or a closed account, much like a bounced check.
Fees
Stripe charges 0.8% per ACH Direct Debit payment, capped at $5.00. A typical US card costs about 2.9% + 30¢.
ACH fee (Stripe) = 0.8% of the amount, capped at $5.00
On a $2,000 invoice, ACH costs $5.00. The same invoice on a card costs about $58.30 in processing fees.
When to use ACH
- Recurring billing. The lower fee applies to every renewal.
- Large B2B invoices. The
$5.00cap makes ACH much cheaper than cards as amounts grow.
Returns arrive days after the debit, so plan for failed debits. Unrecovered returns turn into involuntary churn. In Europe, the equivalent scheme is SEPA Direct Debit.