eChecks: Guide to Understanding How eChecks Work
EChecks has been gaining popularity since the day it was launched because of how convenient and safe it is. It is a type of electronic payment path where money can be transferred from the payer’s bank account to the receiver’s through the Automated Clearing House (ACH) network.
As per Nacha, the organization that keeps a check on the entire ACH transactions, merchants have processed around 31.5 billion eCheck payments in 2023, with a combined value of 80 trillion dollars.
If the business owners start accepting the Electronic Check payment process then they can open themselves to this trillion-dollar market. About 11% of businesses are not into online shopping due to insufficient payment options but integrating eCheck payment processing into their system can increase their sales tremendously. But, it is crucial to understand the workings of Electronic Check Payment and various Payment Processing Companies that allow secured and seamless transactions.
What Is an eCheck or Electronic Check?
An eCheck or electronic check payment is like paying someone an amount through a digital check instead of a paper one. It is a form of payment that can be done from one account to another without physically going anywhere, all it takes is a device and internet connection.
eCheck plays a crucial role in modernizing payment methods by integrating digital payments, and replacing paper efficiently and effectively. Such transactions avoid all the hustles that both individuals and businesses used to face while doing any trade.
Benefits of eCheck Payment Processing?
As we know that eCheck has been rapidly growing and used by multiple businesses. Here are the reasons that indicate why eCheck payments are always way better than traditional ones.
- Simplified Digital Transactions: EChecks simplify online payments by eliminating the need for paper checks and enabling fast secure transactions.
- Global Reach: eChecks surpass geographical limits, enabling easy and efficient worldwide payment transactions.
- Incorporation with Internal Financial Software: Effortlessly link eCheck transactions to internal financial systems, improving record-keeping and boosting organizational efficiency.
- Error Reduction: By utilizing automated processing, the likelihood of human error is decreased, leading to increased accuracy and reliability in financial transactions.
- Simple to supervise: The ability to track eCheck transactions in real-time enables users to effortlessly monitor, increasing transparency and control.
- Improved Process Efficiency: eChecks simplify payment processes, minimizing administrative tasks and enhancing overall operational productivity.
- Cost efficiency: eChecks provide substantial cost savings compared to conventional payment methods, with reduced transaction fees and administrative costs.
How does eCheck payment processing work?
Although, just like paper check payments, eCheck also takes 2-5 business working days to process and settle the payments, due to its digital nature, electronic payments do not require paper checks and going physically to banks to deposit the amount, instead it is the flawless transmit of the payments happen through the internet, faster and convenient comparison to traditional payments.
These are the few steps involved in processing the eCheck payments: –
Get permission
The company must obtain authorization from the customer before proceeding with the transaction. This could occur via an internet payment form, a completed order form, or alternatively, through a phone call.
Setting up payment
Upon approval, the company inputs payment information into its online payment processing system.
Complete and send for approval
The company enters or saves the payment information into the software. This signifies the start of the ACH transaction procedure.
Confirming the receipt of funds and making a deposit.
The amount is deducted from the customer’s account automatically. Next, the online system gives the customer a payment receipt and then transfers the payment amount into the company’s bank account.
How to Initiate the Whole eCheck Payment Processing?
In order to submit an electronic payment/check, the payee has to have set up a registered ACH merchant account. It enables businesses to accept electronic payments and it is also simple to set up through the following steps:
- Federal Tax ID number
- Business name and address
- Transaction processing volumes
- Years in business
- Bank account details
The clients also has to submit all the same information that can be found on a paper check:
- Checking account number
- Bank routing number
- Payment amount
They must authorize the payment, either through online banking or over the phone.
Best Payment Getaways for flawless transactions: –
It is essential to do your research and go for the trusted payment gateway providers where you can make secure and faster payments without any delays. Some of them are:
- PayPal’s Payflow
- Stripe
- eCheckplan
- Shopify Payments
- Square
Steps to Overcome Common eCheck Payment Challenges: –
Although eChecks offer numerous benefits for businesses as payment methods, they are not without flaws. Nevertheless, once you are aware of the disadvantages and how to deal with them, you are unlikely to encounter many issues. Here is a brief overview of some of the difficulties linked to eChecks and possible solutions.
Challenge 1: Risk of Fraud
Malicious individuals are becoming increasingly advanced in their methods of stealing account details, therefore it is crucial for companies to implement strong fraud prevention measures. Account and identity verification systems that validate banking data in real time can detect problems before transactions take place.
Utilizing a secure cloud-based payment portal or gateway for digital payments is an advanced method for safeguarding buyers and sellers from fraud, theft, and security threats. Payment software can be set up to prevent internal fraud and mishandling of data by granting authorized users access to sensitive data.
Challenge 2: Modification of process
If your existing financial software is unable to process eChecks, you may need to upgrade your system, acquire new software, and educate your employees on new accounting and bookkeeping procedures.
Select a payment gateway and other accounts receivable software that can adapt to the constantly changing landscape of digital payments. While using eChecks, you will also gain knowledge about optimal methods, like scheduling processing during less busy times for quicker results.
Challenge 3: Customer hesitation
You might need to inform your customers about eChecks to increase their usage. Fortunately, the majority of buyers prefer the additional flexibility and security that comes with digital payments. Our recent research discovered that 87% of financial executives believe that their customers are prepared to transition to digital payments and avoid using paper checks.
Conclusion: –
eCheck payment is no doubt the most reliable and simple E-commerce Payment Processing one can have, be it a business or an individual but it is also vital to consider certain steps and take essential precautions before using any payment platform. Do your research, read all the terms and conditions, and then commence the limitless world of digital payments.
Accept eChecks for Your Business with eCheckplan: –
If you’re looking for a secure eCheck with a fast processing time, eCheckplan offers just what you need. With our cutting-edge verification and payment security technologies, we offer the fastest and safest eChecks you can find. Sign up for a free trial to try our eChecks for yourself. If you have any questions about sending eChecks, contact us so we can help.
