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Green.Money™

The "Card Cartel":
How Payment Giants Hold Businesses Hostage
Published July 5, 2025 (10-min read)

Introduction: Plastic Promises and Hidden Strings

In today’s marketplace, credit and debit cards seem like the lifeblood of business transactions. Swipe, tap, or click, it’s hard to imagine commerce without those little pieces of plastic. They’ve brought convenience and global reach to businesses of all sizes. But beneath the shiny surface of ease and rewards points lies an uncomfortable truth: the credit card industry has systematically positioned itself to control the cashflow of businesses. By making themselves the sole mechanism for many business payments, credit card companies and banks have gained unprecedented power over what businesses can sell, how they operate, and even whether they can survive.
 
It sounds dramatic, almost like a conspiracy, but the evidence is all around us. Merchants in certain “high-risk” industries find their accounts suddenly frozen or terminated because some algorithm or policy deems them unacceptable. Perfectly legal products get flagged or banned by payment processors, effectively preventing sales. Meanwhile, fees and delays quietly siphon off profits and throttle cash flow. If you’ve ever felt like the rules of the game were rigged, you’re not wrong.
 
This book takes an exposé-style deep dive into how we got here, how credit card giants manipulated the market over decades to push out alternative payment methods (remember checks?), tighten their grip on transactions, and dictate the terms of doing business. We’ll explore why the world moved away from cash and checks toward an all-card economy (hint: it wasn’t just consumer preference), how organizations like Visa, MasterCard, and even regulatory bodies like NACHA (which runs the ACH network) play gatekeeper, and what that means for entrepreneurs. Along the way, we’ll uncover real historical facts that illustrate just how ingeniously, and at times insidiously, this system was engineered to benefit the few at the expense of the many.

Before we can appreciate the escape route, we need to understand the trap. So let’s rewind the story to where it all began: how did credit cards conquer the world of payments, and what did we lose along the way? Are you ready to peek behind the curtain of the credit card empire? Let’s start by looking at how plastic took over our wallets, and our businesses.

The Rise of Plastic Money: A Historical Setup

To understand how credit cards gained control, we need to revisit the history of payment methods in modern commerce. Not too long ago, the idea of paying with a piece of plastic was novel, even a bit suspect, to consumers and businesses accustomed to cash and checks. How did we go from paper and ink to a world where a magnetic stripe (and later a chip) holds the keys to the kingdom of commerce? The journey is both fascinating and telling.

It all started in the mid-20th century with the birth of credit cards. The first widely used credit card, BankAmericard (which later became Visa), debuted in the late 1950s. In those early days, it was pitched as a convenience and status symbol: spend now, pay later, and do it with the swipe of a card instead of bulky cash. For banks, credit cards were a goldmine: they generated interest on unpaid balances and fees on every transaction. Merchants were enticed by the promise of more sales (“Buy it on your card!”) and faster transactions than checks. Credit cards quickly spread through the 1960s and 70s, establishing Visa and MasterCard (originally MasterCharge) as dominant networks, alongside a few others like Discover and American Express.

However, credit cards weren’t initially aiming to replace checks or cash; they were creating a new category (unsecured revolving credit). Checks remained king for many payments, especially for bills and large purchases, through the 1970s and 80s. People would routinely write checks at the grocery store or to pay the electric bill, and businesses would accept them (sometimes nervously, hoping they wouldn’t bounce). As inconvenient as it sounds now, showing ID, scribbling amounts, waiting for bank clears, checks were trusted and had low direct cost to merchants (no percentage fees, just the risk and administrative hassle).

So, what changed? Technology and strategic maneuvering by the card industry changed the game. The debit card was the Trojan horse that helped the card networks invade territory previously dominated by cash and checks. Debit cards started quietly in the 1970s as a way to withdraw money from ATMs, essentially an “ATM card.” By the 1980s, a few banks experimented with letting these cards be used at merchants to directly deduct from a checking account (the earliest debit transactions). But adoption was slow at first. Many bank executives of the time weren’t enthused, after all, debit transactions didn’t earn interest or big fees like credit cards did, and why invest heavily in something that might cannibalize check usage (which was cheap for banks) or credit card usage (which was profitable)? Indeed, surveys in the early 1980s found most banks had no plans to push debit card usage at retail. Consumers, too, were hesitant: a 1971 Federal Reserve study found the public overwhelmingly against electronic payments, preferring the familiarity of checks and cash.

So debit cards languished for a while… until the 1990s, when the stars aligned. Several factors converged: banks had heavily invested in ATM networks (and eventually recouped those costs), computing power made real-time authorization feasible, and importantly, the card networks (Visa and MasterCard) saw a massive opportunity to expand their empires. Debit cards might not charge interest, but if you run them on the same networks as credit, you could charge merchants a fee for each transaction. Multiply that by billions of transactions that used to be free checks and cha-ching! By the mid-90s, Visa and MasterCard were fully on board, treating the debit card as the “next major step” in payments.

Visa’s actions in the 1990s are especially telling. In 1995, Visa launched an $8 million nationwide ad campaign to promote its Visa Check Card (a debit card that bore the Visa logo). This was remarkable: it was the first time Visa had ever put major advertising money behind anything other than credit cards. Why? As Visa’s marketing VP at the time explained, Visa was transforming from “basically a credit card company” into “a payment systems company in total”, and that meant pushing products beyond credit. Visa saw debit as their domain, not something to leave to cash or checks. “We believe the debit card is the next major step out there,” that VP said, and Visa set out to “mainstream” debit cards with consumers through heavy advertising.

The messaging of that campaign was illuminating. One Visa TV ad depicted two old friends on a porch, and one shows the other his new Visa check card. “It looks more like an ATM card with a Visa logo on it,” says the friend, to which the cardholder replies, “It works like an ATM card, only even better… I can make purchases wherever Visa is accepted.” The implication was clear: your boring bank ATM card just got a Visa supercharge. You don’t need to write checks; you don’t even need cash. Just use Visa for everything, even directly out of your checking account. The “New Shape of Checking” was how Visa marketed it in an earlier educational campaign. In other words, Visa literally rebranded and reshaped the concept of a checking account by attaching itself to it.

The results were dramatic. Banks loved it because it reduced the cost of processing paper checks and gave them a cut of merchant fees. Consumers found it convenient – no more fumbling with checkbooks or running to the ATM for cash; one card did it all. By the late 1990s and 2000s, check use in retail was in free fall, replaced by card swipes. In the U.S., the number of payments made by check dropped steadily each year, while electronic payments soared. For example, in just the first few years of the 2000s, check usage declined so fast that researchers described it as finally reaching a tipping point. Fast forward to today: personal checks have nearly vanished in many transactions. A recent 2024 survey found that over 90% of consumers prefer not to use checks for paying bills, and only 6% actually paid a bill by check in a typical month. In 2020, about 19% of bills were paid by check, but by 2024 that share had plunged to just 7%. The difference was made up by electronic payments directly from bank accounts and, of course, by cards. Consumers paid one-third of bills with cards in 2024 (up from a quarter in 2020), and the majority of those card payments, about 18% of all bills, were made with debit cards.

The world, in short, moved away from checks and towards cards (debit and credit), and this shift was no accident. It was driven in large part by a strategic push from the card industry. Visa and MasterCard partnered with banks to ensure that virtually every debit card carried their logos, turning each checking account into a revenue source via swipe fees. They spent hundreds of millions on marketing to change consumer behavior. They even lobbied and influenced banking practices, so much so that it became standard for your “ATM card” to be a Visa/MasterCard card by default. The manipulation was subtle and slow-burning, but highly effective.

From a business perspective, this meant that by the 2010s, if you weren’t accepting cards, you were effectively locked out of a huge chunk of consumer spending. Cash was declining, checks were practically archaic, and customers expected that little Visa/MasterCard logo at the register or checkout page. The credit card industry had succeeded in weaving itself into the fabric of commerce, ensuring that every register rings through their toll booth.

To be fair, this shift brought real benefits: speed, convenience, lower handling costs than managing piles of paper checks or cash. We’re not here to say cards are evil technology, they solved genuine problems. But they also created new ones by concentrating power. To see how that power manifests, we need to examine the rules of the game that came along with this card-based economy. As more business revenue flowed through card networks, the more those networks (and their partner banks) could dictate terms. The next sections will uncover what those terms are and how they can shackle unsuspecting businesses.

Rules of the Game: How Credit Card Networks Dictate What You Sell

By establishing near-ubiquity, the credit card industry didn’t just make itself a convenient option, it made itself the gatekeeper of commerce. When an industry becomes a gatekeeper, it gets to set the rules. And Visa, MasterCard, and the banking partners that issue cards and process payments have lots of rules. If you’re a business owner, you’ve probably only scratched the surface of these when skimming your merchant agreement or hearing about PCI compliance. But the deeper “rulebook” controlled by the card networks goes far beyond technical requirements and swipe fees. It reaches into the very nature of your business: what you sell, how you sell it, and who you sell it to.

This is where the manipulativeness of the system really shows. Under the banner of managing “risk” and “brand reputation,” card networks routinely decide what is acceptable business and what isn’t on their platforms. In practice, this means they can tell you what you can and cannot sell if you want to use their payment rails.

How is this possible in a free market? Let’s break it down: Every merchant that accepts cards is categorized by a Merchant Category Code (MCC), a four-digit code that describes your primary line of business. MCCs range from obvious ones like 5411 for Grocery Stores to esoteric ones like 5968 for “Direct Marketing / Continuity/Subscription Merchants.” The card networks use these codes for tracking and, importantly, for risk management. Certain MCCs are flagged as “high-risk” by Visa and MasterCard, meaning if your business falls under one of these codes, you’re subject to extra scrutiny, special registration requirements, higher fees, or outright bans. For example, Visa’s High Integrity Risk program and MasterCard’s Specialty Merchant Registration list out a bunch of MCCs that are seen as troublesome: things like online pharmacies, gambling, telemarketing, subscription services, cryptocurrency exchanges, and so on. These aren’t illegal businesses per se (some are perfectly legal), but from the card brands’ perspective, they pose a “brand risk.” Maybe they tend to generate more chargebacks, or invite regulatory scrutiny, or just make the network look bad.

If you’re categorized under one of these, getting a merchant account becomes a nightmare. Often you can’t go to a normal processor; you have to use a specialty “high-risk” payment provider who charges through the nose. The fees might be double or triple the standard, you might have to keep a rolling reserve (e.g. 10% of your money held in escrow for 6 months), and you live under the constant threat of being dropped if one too many transactions go awry. High-risk processors exist because the big mainstream processors (the ones who give you a quick account online) will simply refuse you if they see certain keywords or MCCs. For instance, if you try to sign up for Stripe or PayPal and mention “CBD” or “firearms” or “adult entertainment,” you’ll likely be swiftly shown the door. Visa and MasterCard do not officially support CBD transactions even after hemp-derived CBD became legal, meaning any acquirer that signs a CBD merchant is doing so in a gray zone. Many CBD sellers didn’t realize this until their funds got frozen or accounts shut down overnight, when some underwriting team belatedly noticed what they were selling. The same goes for other products: for years, selling dietary supplements, vape products, online coaching programs, etc., could get you categorized as high-risk. Adult content (like pornography sites or cam services) is allowed by card networks in theory but heavily policed; only certain acquiring banks will touch it, and the chargeback rules are extremely tight.

In effect, the card networks have become morality police and risk arbiters for businesses. They will flag and ban “undesirable” industries under the guise of protecting the payment system. Sometimes this aligns with law (e.g. no one is crying that they ban outright illegal transactions like drug trafficking or fraud. Of course those should be banned). But often it ventures into gray areas and subjective judgments. For example, take the nutraceuticals and supplements industry: perfectly legal vitamins and herbal products, but because some bad actors made exaggerated claims in the past, the whole sector is “guilty until proven innocent” in the eyes of payment providers. These merchants face sudden account closures if chargebacks tick up or if a card network sweep finds an ingredient or claim they disapprove of. Online tech support services had a wave of shutdowns a few years back because scammers in India were using tech support as a front. Visa/MC responded by slapping a high-risk label on the whole category, so even legitimate small tech support firms in the U.S. found themselves unable to keep a merchant account without jumping through hoops.

Let’s illustrate this with a concrete example from the peptide supplements industry, as it neatly encapsulates the dynamic. Peptides are short chains of amino acids that fitness and research enthusiasts buy for various purposes (like anti-aging or bodybuilding research). They’re legal to sell for research, but not FDA-approved as dietary supplements. So they live in a gray area. Visa and MasterCard classify peptide sales as “high-risk” or “gray-area” commerce, akin to how they view CBD or adult content. As a result, peptide merchants often face account shutdowns without warning and agonizing approval processes that can drag on for weeks only to end in a “no”. Even if a merchant is fully transparent and compliant with all laws, they’re at the mercy of risk-averse payment institutions that don’t want to deal with the optics or potential liability of peptides. One day you’re processing sales, the next day your processor gets cold feet and drops you, no explanation given.

Businesses caught in this situation describe it as walking on eggshells. One chargeback too many, one random compliance sweep, or even a customer complaint can lead to account termination. The card networks maintain databases of “terminated merchants”, like Mastercard’s MATCH list, so if you get shut down for cause, you can be effectively blacklisted across all processors. Imagine waking up to find all your ability to process credit cards has vanished and no one will touch you because you’re now on the MATCH/TMF list. It happens more often than you think, and not only to outright fraudsters. Legitimate businesses get snared because they had an “excessive chargeback” month (often defined as as little as 1% of transactions being disputed) or violated some fine-print card rule.

Merchants have tried various workarounds to escape these strictures, but most are short-lived and dangerous. Some will attempt “MCC laundering”, running transactions under a different, innocuous category code (say, pretending to be a consulting service rather than selling peptides). Others might route payments through an offshore processor in a country with lax rules or through a friend’s business that has a low-risk MCC. Or they sanitize their websites and descriptors: no mention of “CBD” or “peptide”; use code words instead. These tactics might buy you a bit of time, but the card networks are smart. Their fraud detection algorithms sniff this out eventually, and when they do, the hammer comes down harder. Merchants caught masking their transactions can face fines and permanent blacklisting. It’s like trying to fool a strict school principal. You might slip through the hallways once or twice wearing the wrong uniform, but eventually you’ll get caught, and detention will be severe.

The bottom line is sobering: By depending on credit/debit cards for all our transactions, we ceded a lot of control to the companies who operate those networks. They have achieved a level of centralized influence where, if they consider your business too risky or undesirable, they can effectively cut you off from a huge portion of the paying public. This is particularly painful in sectors at the fringes of mainstream approval, often legal businesses serving real customer demand, yet financially “cancelled” by the overlords of payment processing.

Now, one might ask, isn’t this just prudent risk management? After all, banks and networks don’t want fraud, money laundering, or association with illegal stuff, right? True, and some industries genuinely have higher fraud (e.g. online gambling or certain subscription billing models have historically high chargebacks). No reasonable person would say “let the scammers have access to Visa!” But the critique here is that the card system’s response has been a blunt instrument: they paint entire industries with a broad brush. Their model is to err on the side of “deny and restrict,” which ends up punishing a lot of honest merchants and stifling innovation. Moreover, it conveniently advantages their own bottom line. High-risk merchants who do manage to get processing often pay exorbitant fees, which ultimately flow to the acquiring banks and networks. It’s a captive market dynamic: we label you risky, we charge you more to compensate for the “risk,” and if you don’t like it, well, good luck finding another way to accept money!

There’s a reason some call this the “card cartel.” When Visa and MasterCard (who together control the vast majority of card payments) set policies, even huge businesses have to comply, never mind small merchants. For instance, in recent years these networks have flexed their muscles on social issues: after some mass shootings, there were discussions and attempts to categorize gun store sales with a special code to track them (a controversial move that raised privacy alarms). Under public pressure or internal policy shifts, they could conceivably ban entire categories (imagine they decide tomorrow that no more legal firearm sales on their network. It would instantly choke many gun retailers’ revenue). The power to process is the power to make or break businesses. And we, collectively, handed that power to the card industry when we let them become the default for payments.

Now that we’ve seen how credit card companies set the rules and control what businesses can do, let’s turn to another piece of the puzzle: how exactly did they push aside other payment methods to cement this gatekeeper role? We touched on the decline of checks earlier; next, we’ll explore why checks fell out of favor and what role the financial industry played in that transition, because it’s not just about consumer preference, it’s also about who benefits.

Bye-Bye, Checks: The Death of Paper and the Rise of Visa/MC Debit

Think back to the not-so-distant past: every business had a checkbook and a stack of deposit slips. Paydays involved signing paychecks, and a trip to the bank’s night drop was a ritual. If you’re old enough, you might remember merchants posting signs like “No checks accepted without ID” or “Checks over $100 not accepted.” It wasn’t exactly a golden era of efficiency, checks were slow and manual. But one thing they didn’t have was a toll fee to a third party on each transaction. When a customer wrote a $100 check to a store, the store got $100; they didn’t have to pay 3% off the top to a card processor.

So how did we go from that world to one where even the humble checking account got hitched to Visa and MasterCard? The shift from checks to debit cards (with Visa/MC logos) was partly driven by convenience and technology, yes, but it was also carefully engineered by the financial industry to create new revenue streams and control points.

Let’s break down the factors:
 

  • Efficiency and Cost: For banks, processing mountains of paper checks was costly and prone to errors. The Check 21 Act of 2004 eventually allowed banks to use digital images of checks, reducing some burden, but by then the momentum had shifted to electronic forms of payment. Electronic payments (ACH, cards, etc.) are simply more efficient for the banking system. So, banks had incentive to discourage check usage. Some introduced fees for processing many checks or stopped providing free checkbooks to accounts, subtly pushing consumers to use electronic options.
     

  • Consumer Behavior: As ATMs and cards became common, new generations grew up rarely needing to write checks. Debit cards allowed instant access to funds for purchases, which checks never did (you could present a check, but the merchant wasn’t guaranteed it was good until days later). In an increasingly speed-obsessed retail environment, faster was better.
     

  • Merchant Behavior: Businesses got tired of bounced checks and waiting days for funds. Card payments guaranteed (mostly) that they’d be paid, and paid quickly. Yes, they had to swallow the processing fee, but many decided it was worth it for the speed and reliability, and customers were asking for card acceptance anyway. Checks began to feel like an outdated risk: by the 2000s, a merchant would rather take a debit card with a small fee than a paper check that might fail.
     

  • Strategic Marketing and Deals: We saw how Visa ran big ad campaigns to sell the idea of the “check card” as the new way to pay. But beyond ads, there was strategy in how debit cards were rolled out. Banks automatically issued debit cards to checking account holders and often bundled them: your debit card doubled as your ATM card. In the early days, some people thought “debit card” meant you needed a PIN and that it was separate from Visa, but Visa cleverly branded many as “Visa Check Card” which worked with a signature like a credit card. So at the store, whether you swiped a credit card or a Visa debit card, the clerk couldn’t tell. Both had a Visa logo, both got authorized in the same terminal. The checkout experience converged, making it seamless for consumers to use debit.
     

    Also, consider the reward programs: originally only credit cards gave rewards (points, miles). But in the 2000s, banks even started giving debit card rewards to encourage usage, a short-lived trend, but telling. They were willing to give you a tiny kickback because every debit swipe earned them interchange fees from merchants (as much as 1% of the purchase price).
     

  • Network Dominance: Perhaps the most manipulative aspect was how Visa and MasterCard either acquired or out-competed other payment networks. Back in the day, besides the big two, there were regional ATM and debit networks (NYCE, STAR, Pulse, etc.) that handled PIN-based debit transactions directly between banks. Those still exist for PIN debit, but Visa and MasterCard muscled in with their own PIN networks (Interlink for Visa, Maestro/Cirrus for MasterCard) and by tying their brands to signature debit. Essentially, the card networks ensured that whether you entered a PIN or signed a receipt, they got a cut. The world didn’t so much move away from checks to debit cards in general, it moved specifically to Visa and MasterCard branded debit cards. They positioned themselves squarely in front of that firehose of volume that was leaving checks.
     

So who manipulated this shift? In a word, the biggest winners were the card networks and the banks. It was an alignment of interests: banks wanted lower check handling costs and new fee revenue; Visa/MC wanted more transactions flowing through them. Together, they promoted and built the infrastructure for debit card acceptance everywhere. The result: by the 2010s, it became normal that nearly every payment card in your wallet, whether credit or debit, has either a Visa, MasterCard (or less commonly AmEx/Discover) logo. They co-opted the ACH-based debit (the checking account payment) into their orbit.

One poignant illustration: an executive in the 90s said Visa was evolving into more than a credit card company, it was becoming a total payments company, pushing products like offline debit and even stored-value cards. Translation: they wanted everything: credit transactions and checking transactions (and later things like prepaid cards). And they largely succeeded. Today, if you use a “debit card” from your bank, odds are it’s processing that purchase through Visa or MasterCard’s network, not a direct bank-to-bank link. Those networks collect fees on every one of those transactions. We effectively invited Visa/MC to take a cut of what used to be a direct check payment between a customer and merchant’s banks. You might say the household checkbook got outsourced to Silicon Valley and Wall Street, where Visa’s headquarters and the big card-issuing banks reside.

Is it any wonder, then, that checks have all but disappeared? The convenience factor sealed the deal. It’s hard to argue that we should still be scribbling on paper and showing driver’s licenses at checkout. But we should recognize that the “inevitable” rise of electronic payments was guided in a specific direction, one that funnels through a few giant corporations rather than, say, a public utility or more open network.

Interestingly, the other possible replacement for checks, the ACH (Automated Clearing House) electronic debit, could have filled this role more directly. ACH is essentially the system that moves money between bank accounts, often used for things like payroll direct deposit or automatic bill drafts. It’s been around since the 1970s as well. Why didn’t ACH-based payment options replace checks at point-of-sale or online? In theory, one could imagine in an alternate world, instead of whipping out a Visa card, you could swipe your bank account card that directly triggers an ACH from your account to the merchant’s account. Some countries have systems more like that (for example, in Europe, direct bank transfers and debit PIN systems are common). But in the U.S., ACH is slow (funds can take a day or more to clear) and wasn’t originally designed for on-the-spot retail payments. The card networks provided instant authorization and guarantees that merchants loved. ACH development for retail was neglected, partly because banks themselves were making money from cards and saw no need to invest heavily in an alternative that might reduce those fees.

This brings us to NACHA and the ACH network, and an important point: while Visa and MasterCard were grabbing territory in everyday payments, the banking industry’s own electronic network (ACH) remained in the background, used for less visible purposes. But NACHA (the rulemaking body for ACH) plays a huge role in who gets to use that network, and they haven’t exactly flung the doors open for any business to use ACH as they please. Let’s explore that, because it ties into why high-risk businesses until recently had few places to turn.

The Invisible Gatekeeper: NACHA and Control of the ACH Network

While Visa and MasterCard were busy conquering the world of consumer payments, another network was quietly running in parallel: the Automated Clearing House (ACH) system. If you’ve ever received a paycheck via direct deposit, paid a utility bill through bank draft, or set up an automatic mortgage payment, you’ve used ACH. It’s the behind-the-scenes electronic system that moves money between bank accounts in the U.S., essentially an electronic version of writing someone a check, but processed in batches by computers.

Unlike the card networks (which are for-profit enterprises owned by banks and other stakeholders), the ACH Network is a bit more of a cooperative, overseen by an organization called NACHA (formerly the National Automated Clearinghouse Association, now just called Nacha). NACHA is a non-profit association that includes over 400 member banks and institutions. It administers and develops the rules for ACH and ensures banks follow them. Think of NACHA as the rulemaker and gatekeeper for any transfers that go through this system.

Now, you might wonder, if ACH is an alternative way to move money (and often cheaper per transaction than card networks), why haven’t businesses simply used ACH to avoid the credit card cartel? The answer: NACHA’s rules and the banking system’s risk aversion have made ACH not so easy to tap into for many businesses, especially high-risk ones. Essentially, NACHA and the banks control who can and cannot use the ACH network by setting strict requirements and by limiting direct access.

Here’s how it works in practice. To initiate an ACH payment (say, to pull money from a customer’s account as a business), you typically need to work with a bank (known as an Originating Depository Financial Institution, ODFI in NACHA terms). The bank sponsors your transactions into the network. That bank will only do so if you sign an agreement and meet their underwriting standards, because the bank is on the hook if something goes wrong. They warranty that the debits are authorized and bear the risk of returns. NACHA’s rules include various risk controls: for instance, if too many of your transactions come back as unauthorized or with errors, NACHA can investigate and even levy fines or force the bank to drop you. Currently, NACHA has set thresholds like 0.5% for unauthorized returns (recently tightened from 1.0%) and 3% for administrative errors; if an originator exceeds these, it triggers scrutiny or action. So banks are extremely cautious about which clients they allow to do ACH debits.

For “high-risk” industries, the reality is that many banks simply say no thanks to letting them use ACH. The Office of the Comptroller of the Currency (OCC), one of the bank regulators, explicitly advised banks to be very careful with high-risk ACH originators or third-party payment processors. In fact, some banks have policies that outright prohibit doing ACH business with certain types of high-risk originators. NACHA, on its part, has supported such risk-based approaches. They’ve set up things like a Terminated Originator Database and an Originator Watch List to help banks identify problematic merchants across the network. And the NACHA fines for rule violations can be hefty, giving banks further incentive to avoid any client that might land them in hot water.

So who falls into this “high-risk originator” bucket for ACH? The OCC bulletin from 2006 (and NACHA’s own operations bulletins) mention exactly the same suspects as the card networks: businesses engaged in potentially illegal activities or those with high return rates (which often correlates with deceptive or contentious businesses like certain payday lenders, online gambling, etc.). It notes that many of these high-risk guys end up using third-party processors because they struggle to get a bank to work with them directly.

One infamous episode in the 2010s was “Operation Choke Point,” a U.S. Department of Justice initiative that pressured banks to cut off certain industries from banking services (things like payday lenders, online tobacco, porn, gun retailers) by treating them as high-risk for fraud. While controversial and now ended, Operation Choke Point highlighted how easily the chokepoints of finance can be used to control industries. Without a bank account or payment processing, a business can be strangled out of existence, hence the name. In the case of ACH, if NACHA rules or bank policies say “you can’t use ACH because we don’t like your line of business,” that’s effectively a private-sector blacklist. High-risk businesses often find it almost impossible to get an ACH merchant account for debits, unless they find a niche payment processor who has a special relationship with a willing bank.

Let’s compare this to checks. Back in the day, if a customer wrote you a check, it would clear through regardless of whether your business was selling cookies or cannabis (as long as the bank didn’t have a policy against banking your type of business). There wasn’t an automated system saying “oh, this check is going to a payday loan company, better not process it.” The ACH introduces that oversight because to use it, you need permission effectively. It’s not a peer-to-peer system; it’s a club where banks act as gatekeepers.

NACHA’s stance might not be malicious. They aim to maintain the integrity of the network. And indeed, ACH is remarkably robust and huge: by 2023, merchants were processing 31.5 billion transactions worth an astounding $80 trillion via ACH (electronic debits). Yes, trillion with a T, far eclipsing what card networks process in dollar volume (because ACH carries everything from payroll to mortgage payments). With that scale, they are understandably cautious about fraud and illegal use. However, it does mean that NACHA (and by extension its member banks) control the spigot of who can tap into this $80 trillion network. It’s a form of control that parallels the card networks: if your business is on the naughty list, you might be stuck using only cash or shady intermediaries to move money.

In summary, the ACH network could be a public highway for payments, but in practice it has toll booths and checkpoints. NACHA’s rules and bank policies ensure that only those deemed “acceptable” get through easily. High-risk businesses face barriers here just like with cards, albeit for somewhat different reasons (compliance and return rates vs. brand image). It’s another example of how the financial system picks winners and losers by granting or denying access.

At this point, we’ve painted a rather oppressive picture: credit card companies and banks have, through both overt and subtle means, cornered businesses into relying on them, and they exert control over what products can be sold (or at least, which ones they will facilitate payments for). If you’re a business owner, especially one in a fringe or innovative field, this might feel like a vise grip on your livelihood. Even if you run a mainstream business, you’re still paying the “tax” of interchange fees and adhering to myriad card security rules, etc. The question then becomes, what can be done about it? Are we truly stuck, or is there a way to regain some control and independence in how we get paid?

The good news is, innovation hasn’t stood still. In recent years, a number of alternative payment methods and financial technologies have emerged aiming to give businesses and consumers choices beyond the traditional card networks and slow-moving bank systems. Some have fizzled, but some are gaining traction, particularly in those high-risk industries that have no other choice but to seek alternatives.

Next, we’ll explore the solutions: from modernized digital checks to real-time bank transfers to even cryptocurrency in some cases. We’ll focus on one solution that stands out for business use, something we’ve hinted at already: eDebit via Green.Money and similar platforms. How do these work, and why might they be a game-changer for businesses that have been boxed out by the credit card cartel? Let’s dive in, because this is where the hope lies – in breaking free of the stranglehold.

Breaking the Chains: Alternative Payment Methods on the Rise

By now, the pattern is clear: the traditional payment ecosystem (cards and bank ACH) can be hostile or costly to many businesses. It’s like an exclusive club with high dues and a picky bouncer. Naturally, entrepreneurs and technologists have been busy building alternative ways to pay, essentially sneaking new doors into the club or creating a whole new venue altogether.

Let’s survey some of the notable alternative payment methods that have gained attention:
 

  • Cryptocurrencies (Bitcoin and friends): A few years ago, crypto was hailed as the ultimate way to bypass banks. Just transact on the blockchain, no middleman! And indeed, some high-risk merchants (like certain supplement or adult websites) experimented with accepting Bitcoin when they couldn’t get credit card processing. The allure was obvious: no chargebacks, no underwriting, money that can’t be frozen by a bank. However, crypto’s volatility and low mainstream adoption make it impractical for most businesses’ day-to-day use. It also introduced other headaches (tax, converting to cash, etc.). So while crypto remains a maverick option, it hasn’t (yet) become a widespread solution to the problem at hand, except perhaps in niche tech-savvy circles.
     

  • Third-Party Wallets (PayPal, Venmo, CashApp etc.): These fintech platforms often ride the card rails or ACH rails underneath, but provide a layer that sometimes offers more tolerance. For instance, PayPal in its early days would service some gray-area merchants that couldn’t get a direct merchant account (though PayPal too has a long list of prohibited activities and will freeze accounts readil, just ask anyone who sold something mildly unusual and got caught by PayPal’s risk team). Venmo and CashApp are mostly peer-to-peer, not for business transactions at scale. These wallets are also typically tied to your identity and bank/card, so if you’re banned by card networks, you might also get banned on mainstream wallets that integrate those networks.
     

  • Bank Transfers 2.0 (Open Banking): In some parts of the world, and increasingly in the US, there’s a push toward open banking APIs where customers can pay a merchant directly from their bank account via a software integration, no card network in between. In Europe, this took shape under regulations like PSD2, which made banks open up APIs, and now you have services where at checkout, you can choose your bank, login, and approve a payment that moves directly from your account to the merchant’s (often via instant SEPA transfer). In the U.S., we don’t have a mandate like that, but companies like Plaid have built popular interfaces to connect with bank accounts (Plaid is the tech behind linking your bank to apps like Venmo, Robinhood, and Green.Money).
     

    Using such tech, some payment providers have created an experience similar to a debit card purchase but using bank login credentials. Essentially, the customer securely logs into their bank to authorize an ACH transfer to the merchant. This is a big part of what Green.Money’s eDebit does: it uses bank verification (often via a Plaid integration or similar) to let customers pay directly from their account, without a card. The process feels modern: a slick web interface, immediate verification, whereas old-school ACH would have made you type in routing and account numbers and maybe wait for micro-deposits to verify.
     

  • Real-Time Payments (RTP) and FedNow: These are new infrastructure improvements in the banking world. The RTP network (launched by The Clearing House) and FedNow (launched by the Federal Reserve in 2023) allow instant bank-to-bank transfers 24/7. In theory, these could enable point-of-sale or immediate e-commerce payments directly from accounts, which could be alternative rails separate from card networks. They’re still in early adoption phases and mostly used for P2P or B2B at the moment, but watch this space.
     

  • Electronic Checks and eDebit Platforms: This is a broad category that includes everything from a “Pay by eCheck” option on an invoice (where the customer types their routing/account number for an ACH debit) to more sophisticated gateways like Green.Money’s eDebit which effectively combine the best of Plaid and online processing. We’ll focus on this category, because it directly addresses the needs of high-risk and mainstream merchants alike in challenging the card monopoly.
     

The common thread in many of these alternatives is cutting out the card middleman and connecting payers to payees more directly (usually via the banking system, but in a streamlined way). By doing so, they often bypass the rules and fees of the card networks. For example, if a customer pays a merchant via an eDebit transaction, there’s no Visa or MasterCard in the loop to take a cut or to enforce MCC codes.

Now, let’s talk specifically about Green.Money’s eDebit platform, as it provides a tangible example of how an alternative can empower businesses. Green.Money has been around since 2008, focusing on those underserved and high-risk merchants who were rejected or burned by traditional processors. In that time, they’ve processed billions of dollars in transactions for tens of thousands of merchants, which shows that with the right approach, even “pariah” industries can achieve significant volume when given a chance.

So, what does eDebit actually entail? In simple terms, eDebit is an electronic debit from a customer’s bank account, packaged with a modern user interface and a robust backend that makes it behave a lot like a card payment from the merchant and customer perspectives. For the customer, it might mean during checkout they select a “Pay by Bank” or “Pay via eDebit” option, then securely log in to their bank (through Plaid) to authorize the payment. No card numbers, no writing checks, no routing or account numbers to find or memorize, just a few clicks. For the merchant, once the customer authorizes, the payment gateway immediately confirms the debit and processes it. The merchant gets notified and, importantly, the funds are on the way with certainty (just like a card auth tells you funds are captured).

One huge advantage here: no card chargebacks. In the card world, a customer can dispute a charge for a broad range of reasons (fraudulent use, product not as described, or sometimes just buyer’s remorse disguised as fraud). With eDebit, the only comparable mechanism is an “unauthorized debit” claim under Regulation E (for consumer accounts). Those have a strict definition, essentially the customer saying “I did not authorize this transaction.” It’s a higher bar than the myriad of chargeback reason codes in card land. There’s no chargeback code for “merchandise not delivered”; that’s a matter to resolve outside the payment network. So from a merchant’s perspective, direct debits drastically reduce the risk of frivolous or fraudulent disputes. The Green.Money peptide industry report noted that by bypassing credit cards, merchants eliminate the “friendly fraud” where customers call the bank to reverse charges despite receiving product. With eDebit, once the payment is authorized and clears, it’s your money unless the customer truly had no role in it. This is a game-changer in high-risk industries that are plagued by high chargeback rates (e.g. supplements, trial offers, etc.).

Another benefit: lower fees. Credit card processing typically costs a merchant anywhere from ~2.5% to 5% (even higher for high-risk accounts) of each sale, plus transaction fees. Green.Money’s model is to charge much less than typical card rates, meaning merchants keep more of their money. A Green.Money use case example: credit repair companies often deal with clients who can’t get credit cards, so they need eDebit anyway; by using eDebit they not only serve those clients but also save significantly on transaction costs versus card fees. Lower costs equal higher profit margin for the business or lower prices for consumers. Either way, it’s an efficiency gain.

How about speed? One concern with ACH was always that it’s slow (funds take a couple of days to settle). But some providers have innovated there too. Green.Money, for instance, offers Same-Day or even Instant Deposit in many cases. They’ve effectively figured out how to get the money to the merchant the same day a transaction is initiated, rather than waiting the typical 2-3 days for ACH clearing. This means a merchant using eDebit could get their cash flow as fast or faster than card processing, which sometimes has 1-2 day settlement times and can introduce delays or rolling reserves. One cheeky line from Green.Money: “Why wait in line 3-4 days? With us, get your money Same Day!”, tapping into the frustration merchants have with slow funding.

Crucially, eDebit and similar bank-pay solutions give back control to merchants in terms of what they can sell. Remember those dreaded MCC codes and risk rules? With direct bank payments, there’s no Visa or MasterCard peering over your shoulder telling you your product is disallowed. As long as your business is legal and the bank working with the processor is okay with it, you can get paid. Green.Money’s clientele is a testament: they openly serve industries like CBD, hemp, nutraceutical supplements, firearms accessories, adult products, tech support, online coaching, etc., all categories where Stripe or PayPal might ban you in a heartbeat. With eDebit, “high-risk” merchants suddenly have a reliable payments lifeline. A CBD seller, for example, can stop worrying about waking up to an email that their card processor froze their account for “violating terms.” Instead, they use an eDebit gateway that specializes in their industry, knows the compliance landscape, and isn’t going to flinch because Visa isn’t involved. The result: stability. As the Green.Money CBD report put it, “alternative payment systems, especially those built for regulated and high-risk sectors, give CBD merchants the reliability and control needed to operate without disruption." When your revenue stream is stable, you can actually focus on growing your business instead of constantly looking over your shoulder for the next shutdown.

There’s also a customer privacy advantage. Some consumers feel uneasy having certain purchases show up on their credit card statements (think: subscriptions to sensitive services, adult products, cannabis-related items in states where it’s legal, etc.). Bank debits can be white-labeled on statements, meaning the descriptor can be made discreet, often just a generic business name that doesn’t raise eyebrows. Additionally, the process of logging into your bank might even feel more secure to some customers than entering card details (which can be stolen or skimmed). So with proper education, customers may appreciate the option.

Businesses have reported that offering a direct debit option can reduce failed payments (since bank accounts don’t “decline” like cards do when they hit credit limits or expire) and improve customer retention on subscriptions. For instance, a subscription service for nutraceuticals found that cards kept failing or expiring, but bank debits don’t expire, so their continuity improved and fewer customers accidentally churned off.

Let’s consider a hypothetical but realistic scenario to illustrate the solution in action:

Jane runs an online store selling herbal wellness supplements and CBD-infused products. She’s passionate about helping customers, but she’s had nothing but trouble with payments. First, PayPal shut her down the moment they spotted “CBD” on her site. She then got a high-risk merchant account through a specialist, but it cost her 8% per transaction with a 10% reserve, a huge chunk of her revenue, and even then, the bank closed it after 6 months due to “excessive chargebacks” (some customers would dispute charges if the product didn’t miraculously cure them, not Jane’s fault, but she ate the loss). Desperate, Jane even tried labeling some transactions as “essential oils” under a friend’s business to slip through. That lasted about two weeks before the processor sniffed it out and banned her for misrepresentation. Business was booming but her payment woes were killing her.

Enter an eDebit solution. Jane integrates Green.Money’s gateway on her website. Now customers have an option: “Pay by secure bank transfer (recommended for CBD purchases)”. At checkout, a customer selects it, quickly logs into their bank via a secure popup, and confirms the payment of $85. No card needed. The interface reassures them “Bank payment secured by [bank name].” The sale goes through. Jane gets an instant notification that the payment is successful and will be deposited. Over the next months, she notices a few things: her payment success rate is higher (fewer false declines), her fees are a flat 2.9% (just as an example) which is a fraction of what she paid before, and she hasn’t had a single chargeback. A couple of times, a customer had an issue (like a package lost in mail), but they reached out to Jane for a refund rather than gaming the system, perhaps because pulling money back from a bank transfer isn’t as simple as calling up Visa to dispute. Jane resolves those amicably. Meanwhile, she’s sleeping better at night because no one can randomly freeze her account. The payments hitting her bank each day are her funds, not subject to a processor’s whims. Her cash flow improves too: the eDebit provider deposits her money the same day (since they have a same-day funding policy). With this stability, Jane expands her product line and grows her business by 50% in a year, something she felt too hamstrung to do earlier when everything was tenuous.

This scenario mirrors the testimonials of many businesses who have switched to alternative payments. For high-risk industries especially, it’s often not just about cost, it’s about survival. The ability to accept payment reliably is oxygen for a business. You can’t operate if you keep getting cut off. And even if you’re not high-risk, having an alternative channel can be great leverage. Some mainstream businesses add eDebit as an option to save on fees for large transactions. Others use it to reach customers who don’t have credit cards or who prefer not to use them (yes, there are demographics, like some older or lower-income groups, who actually prefer a direct bank draft or even cash).

We should also note: alternative doesn’t have to mean either/or. Many smart merchants now offer multiple methods: card, PayPal, eDebit, etc. They let the customer choose, and they have backups if one fails. That in itself reduces the power any one provider has over them. If Visa decided tomorrow to drop, say, all vape product sales, a merchant already taking eDebit could pivot customers to that method and keep going. It’s business continuity planning.

All told, the message here is one of empowerment and diversification. The days of being 100% beholden to credit cards are ending, if you choose to take advantage of the new tools out there. Is the credit card industry going away? Of course not. They’ll still be huge and dominating for a long time in many sectors. But their stranglehold is weakening as technology provides alternate routes.

In the final section, we’ll wrap up our discussion by synthesizing what we’ve learned: how the credit card-centric system was deliberately shaped (and sometimes warped) by those in power, and how the rise of alternative methods like Crypto and eDebit can shift power back to businesses and consumers. We’ll conclude with some actionable insights for business owners looking to regain control of their cashflow and future-proof their payment strategy.

Conclusion: Regaining Control of Your Cashflow

The journey we’ve taken in this book reveals a classic story of power dynamics in commerce. What started as a clever innovation (the credit card) grew into a colossal industry that set the rules for everyone else. The big credit card networks and their partner banks successfully steered the world away from independent payment methods (like checks or direct bank payments) into their toll-controlled highways, all under the banners of convenience and security. In doing so, they accumulated not just profits, but influence, influence over what businesses can thrive and which ones struggle.

We pulled back the curtain on how this influence is exercised: through arcane rules, risk ratings, and selective enforcement that often leave entrepreneurs scratching their heads or scrambling for workarounds. The credit card industry, in many ways, became a de facto regulator of businesses, sometimes even more impactful than governments. They could outlaw your product (by refusing to process it) faster than a legislature ever could. They could tax your revenue (via fees) without you having any say. And for a long time, we collectively just accepted this as the cost of doing business.

But the landscape is changing. History shows that no monopoly or oligopoly holds its power forever, especially not when technology and customer preferences evolve. We’re now in an era where digital solutions can reintroduce competition and choice into the payments space. The rise of alternative payment methods: from mobile payments, to real-time bank transfers, to platforms like eDebit, is giving businesses a chance to take back some control. It’s a bit poetic: the credit card companies once used technology to disrupt the old way (checks), and now new technology is coming to disrupt the disruptors.

For businesses, the key takeaway is diversification and education. Don’t put all your eggs (or revenues) in one basket controlled by one entity. If you’ve felt constrained or abused by the card system, start exploring other channels. Educate your customers as well. Many will happily switch to a method that you explain is safer or cheaper or supports their favorite store better. (For instance, some merchants offer a small discount for paying by bank transfer or eDebit, passing along a bit of the savings from avoiding card fees, and customers appreciate saving money too.) We’re not saying to stop accepting cards entirely. That’s unrealistic in most cases, as cards are still a huge preference for many shoppers. But adding an alternative isn’t as hard as it used to be, and it can serve as an insurance policy against the whims of the card industry.

It’s also worth noting the broader societal angle: A system where a few big companies dictate terms for all businesses is not healthy for innovation. How many great business ideas were snuffed out because the founders couldn’t navigate payment compliance? How many industries were forced to stay underground or cash-only (with all the security risks that entails) because mainstream finance shunned them? By supporting and adopting alternative payment solutions, entrepreneurs and consumers alike are voting for a more open, inclusive economy. One where legal, responsible businesses don’t get arbitrarily handcuffed because they don’t fit someone else’s model of “low risk” or “proper”. High-risk does not automatically mean “bad," often it just means different or new. Today’s high-risk industries (like, say, cannabis in legal states, or fintech services, or online content creation) might be tomorrow’s commonplace. If we allow gatekeepers to choke them, we stifle progress.

This isn’t just about money moving around electronically; it’s about people. People trying to run businesses, feed their families, follow their passions. And people buying goods and services, often unaware of the drama behind the scenes but directly impacted when a merchant they like suddenly can’t take their payment or goes out of business. By understanding the system, all of us as business owners, consumers, and maybe even as workers within that system, can push for change.

So, let’s recap in plain terms:
 

  • The credit card industry deliberately shaped the payment landscape to favor card usage (bye-bye, checks), giving them fee income and control.
     

  • As a result, they gained the power to influence what businesses do, via risk rules and selective service. Many legitimate businesses have been unfairly constrained by this (examples: CBD being unsupported, peptide sellers getting accounts shut for no illegal reason, etc.).
     

  • NACHA and banks similarly gatekeep the direct ACH network, though for slightly different reasons, making it hard for those same “high-risk” folks to use the banking system freely.
     

  • Relying solely on such a system is dangerous for businesses. It’s like relying on a single supplier who might cut you off. We saw the consequences: frozen funds, surprise account terminations, sky-high fees, and constant anxiety for those affected.
     

  • But solutions exist today. One shining example is eDebit via platforms like Green.Money, which bypass card networks and let businesses transact directly with customers’ bank accounts, safely and efficiently. These solutions have demonstrated real benefits: fewer or no chargebacks, lower fees, quick access to funds, and the freedom to sell what you lawfully want to sell without interference.
     

  • Many businesses, especially in historically shunned industries, are already thriving using these alternatives. From CBD companies lowering their costs and avoiding shutdowns, to online coaches and subscription services keeping their continuity by using bank debits that don’t mysteriously fail like cards do, the case studies are piling up that this isn’t theoretical. it’s happening on the ground.
     

In closing, the use of credit cards as the sole mechanism for collecting cashflow was indeed, as we posited, by design of a manipulative industry architecture. But now that we see the design, we are no longer trapped by it. There’s a classic phrase: “Follow the money.” In our context, if you follow who benefits from everyone swiping cards, it leads to the incentives that built this structure. Now, it’s time to follow a different trail, one where the money flows more directly between those who earn it and those who spend it, with fewer tolls and dictates.

As a business owner reading this, consider yourself equipped with knowledge that many of your competitors might not have. You have an edge now. You know that you don’t have to accept the status quo. You can take actionable steps: research alternative payment providers, have honest conversations with your payment processors about their rules (sometimes just asking for lower fees or exceptions can yield something if you have leverage), and crucially, educate your customers. People are surprisingly understanding if you explain, “Hey, using this payment method helps support my small business more, because big banks take less of a cut.” In an era where “supporting local” and “ethical spending” are trends, payment choice can be part of that story.

The future of payments will likely be a hybrid. Cards will evolve (maybe they’ll embrace crypto or open banking themselves to stay relevant). Banks might get more open (FedNow, etc., could birth new innovations). But one thing is certain: businesses that proactively diversify and take control of their cashflow will be more resilient and successful than those who don’t. Don’t be the store that has to put up a “Closed” sign because your only payment provider pulled the rug out. Be the store that always has a plan B (or C, or D).

The narrative of David vs. Goliath fits nicely here. Small businesses and new payment innovators are the Davids challenging the Goliath of the entrenched card industry. And as we’ve shown, that giant’s armor has some gaps.

Let’s end on an optimistic note. Imagine a world a few years from now: You walk into a shop or visit an online store. At checkout, you see multiple options, maybe you scan a QR code to pay directly from your bank app, or you click “Pay by Bank” and avoid card fees, or you use a digital wallet that isn’t tied to Visa at all. You choose what’s best for you and the merchant. Money moves swiftly and safely, and the business owner smiles because they got paid without drama, without a chunk taken out unfairly. That’s a world where businesses truly control their cashflow, not the other way around. It’s a world that’s better for everyone (except perhaps a few credit card execs worried about their bonus. But hey, competition is healthy).

We can build that world. Indeed, we are already building it. All it takes is breaking the habit of assuming the old way is the only way. So go ahead: cut up that mental contract you never signed that said “I must bow to the credit card companies.” You have options, and now you know about them.

In the game of money, it’s time for the masses: the business owners, the entrepreneurs, the creators, to regain control of the board. After all, it’s your money flowing through your business; you deserve a say in how you collect and keep it. And that’s something the credit card industry never wanted you to realize.

Thank you for reading, and here’s to your future, freer and more prosperous, unshackled from the schemes of the past.

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