We all have heard about checks, traveler checks, cashier and banker checks but what the heck is an eCheck? The ‘e’ simply means electronic. eCheck or electronic check is nothing but the electronic/digital version of old conventional checks. Yes, you might still be using those paper checks, eCheck is just their evolved form, the same old wine in a new bottle, so to say.

Checks have always been a flexible mode of payment since their underlying importance is in the information on them (the receiver, amount & the signature). The global transaction made by conventional checks has been decreasing due to the penetration of cards and  digital payment methods but eChecks have picked the baton right where the conventional check dropped it. A paper system is inefficient with the demands of the modern world. It is expensive considering the ink and paper and also allows errors to creep in since data from paper checks is entered onto computer systems. They have to be stored physically, which occupies space and is more prone to damage, theft and fraud in comparison to eChecks. eChecks on the other hand are completely electronic and do not use an inch of paper during the whole transaction cycle. They use digital signatures for authentication and funds are transferred between the bank accounts once the eCheck is cleared.

However, in some ways eChecks are similar to paper checks; they contain the same info like routing nos, checking A/C no, the amount payable, person/company made out to etc. They can also bounce, can be cancelled and float till they are cleared just like the conventional checks. eCheck payment is exponentially simpler and less complicated than paper checks and a safer and more precise way to exchange funds.

You have seen how an eCheck differs from conventional checks and have grasped a basic concept of eChecks, now let’s get into details. First, we will understand the different components or fields in an eCheck and then we will explain to you how the eCheck system works in the real world.

Bank name and address

Name of the payer with address

Date when the eCheck is made out

The number of funds to be transferred

9 digits routing number

Bank account number of the payee

Check number

Transit code for the eCheck

eChecks are processed over the ACH (Automated Clearing House) network. The whole process consists of 4 steps: authorization, payment set-up, finalization/submission of the request and finally confirmation of payment (funds deposition). Let’s now discuss each of these steps in a bit more detailed manner as to what actually happens from the point you make out to an eCheck to the point when funds are received at the recipient’s end.

1. Check Verification
After both parties i.e. the payee and the payer agree to an eCheck transaction. The first step is when a user fills up an eCheck authorization form and sends it to the merchant, who after receiving authorization looks at the eCheck details and verifies them. The payer can conduct this step via email, by filling up an online form or through a telephone conversation. If the payer’s payment information is correct the merchant begins to initiate the transaction by preparing it to forward to their eCheck service provider.

2. Setting up payment:
Initiating the transaction means entering the payer’s details into the  eCheck payment processing software. Sometimes this information is automatically picked up by the software via the online form (it must be entered manually in case of authorization by email or phone call). If the payment is recurring, it is marked in this application in this step. Thus a single eCheck can be used to make multiple payments in case of rent, subscriptions, periodic installations, utility payments etc.

3. Submission of request
If the information entered is final and correct, the merchant hits the send/submit button and the eCheck goes into the floating period. This marks the start of the  ACH payment transaction process. Your eCheck processing has begun once this step is complete.

4. Confirmation of payment
At this stage, the information reaches the  eCheck payment service provider who initiates the transaction. This is done by forwarding the request to the ACH network. Once the payment or eCheck transaction is cleared by the ACH network, the funds are directly withdrawn (debited) from the payer’s account and deposited (credited) into the payee’s account.

Businesses that indulge in regular transactions can use eChecks for sending/receiving payments on the internet.

eChecks are basically electronic checks, mostly they are electronically used and processed. However, you can also print these on normal printing papers.

It can take from a few minutes upto 2-3 business days to get on-board the eCheck payment service.

Consumer checking account, corporate checking account, saving account and consumer accounts can be used to credit and debit eCheck transactions.

Yes, you can make one time payments with eCheck services.

Yes, you can opt for recurring payments with eCheck services. eChecks are the preferred way to make recurring payments.

Verification of eChecks can be done any day, sales and refunds can be also submitted any day of the week but funds will only be settled only on open bank days, i.e. Monday to Friday and on Saturday in some organizations.

eChecks are usually sent out in bulk for processing by the merchant's eCheck service provider to the ACH network.

Yes, as long as the eCheck transaction is not already in progress it can be annulled or made void.

Consumers bank with their checking accounts can reject eChecks due to a number of reasons like insufficient funds, unfunctional account, discrepancies in eCheck related details etc.

eCheck funds can be settled next day or within 2-3 days at the earliest.

Report to the police and cyber crime unit in your area immediately as soon as you notice discrepancies in your eCheck payment books or smell foul play.

In the payments universe, the ACH occupies a very special place. ACH stands for Automated Clearing House, and as the name suggests it is responsible for clearing all kinds of  electronic and digital payments. From depositing your salary into your account to processing debit/credit transactions, ACH takes care of all of it.

Yes, the ACH network handles all kinds of digital transfers and electronic payments and much more. Processing of funds in-between different modes, direct money transfers, recurring payments etc. are all processed via the ACH network. Thus this system ends up processing millions of transactions each day. This whole system is automated and works all on its own. It communicates between banks telling were to debit the money from and where to credit it.

ACH transfers are beneficial in several ways since they are low fees or free, they are fully automated and do not require human interference at any point in the transaction. Once the account from which funds have to originate is acquired the ACH network gets to working the transaction.

Well, you have to literally make zero effort to get on this wagon. You already know everything that you need to know about filing an eCheck because it’s the same as paper checks. Anyway, we will still reiterate the process for you. It’s fairly easy and simple. You won’t need a pen or a checkbook, what you’ll need are a browser and a keyboard. Let’s begin:

1. Check your bank account balance
This is check/eCheck writing lesson 101, you need to ensure that you have sufficient balance in your account before proceeding to write an eCheck. If you don't have the required balance, the eCheck will bounce and you definitely don't want that. If you don't have the funds in your account, 'do not write the eCheck as the 'float time is very less and your plans of depositing the funds before the check clears are literally futile here.

2. Fill up the eCheck request form
Pull up your eCheck services and fill up the form online on their website, on an application/software they have provided or complete the authorization via an email or a telephone call. Either way, in this step all you need to do is pass on the accurate info that will go into your eCheck to your eCheck service provider. Enter all the details correctly.

3. Check details and press submit
Check again for you may have made errors entering so many numbers in separate fields. If you're sure that all the information you have provided is correct, click the OK/submit button and you're all set. This is where your part ends. It only takes a few minutes, just like a paper check.

Spending was never easier. Today, there are scores of ways in which you can part with your money. It can be a swipe, a wave, or a dip of the card. If that’s not enough you can pay simply by using your fingerprint or myriads of other forms of digital payment systems. So, in this multidimensional payments market, where does eCheck fit in? We will tell you exactly when and where you should pull out the eCheck, well not quite literally!

1. Large amount transactions
In comparison to other payment methods, eChecks are fairly cheap since their processing charges are minimum. This is the reason why it is beneficial to use eChecks for moving large funds between accounts. eChecks are also a good option for smaller funds since they do not take a large percentage of the transaction amount as processing fees.

2. Recurring payments
For recurring payments like rent, subscriptions, monthly or yearly instalments and utility services like gas, electricity etc. you can use eChecks. Simply cutting one single eCheck and marking it for recurring payments will do the job and you wouldn’t have to bother with making repeated payments.

3. In place of paper checks
If you are still a fan of paper checks, now is the time to change sides. Use eChecks as they are safer, faster, and convenient and the best part is they are paperless and you wouldn’t have to go to the bank too! Save trees, go green. Think sustainability, switch to eChecks today.

4. Lack of funds on other payment systems
When you are low on funds in other payment accounts, you can use eChecks to pay. If your eCheck payment account also does not have the required funds, don’t worry as you get a ‘float time’ of 3-4 days in which you can arrange funds. Still, it has an edge over other payment methods which won’t go through if your balance is below the required amount.

5. When delivery issues are not pressing
For eCommerce payments, eChecks can be an amazing payment option. Since a day or two in delivery won’t hurt, eChecks can be used here to make transactions without worrying about an immediate transfer of funds.

6. To make things easier for the customer
Every business aims to make things as easy as possible for the customer. eChecks offer a level of ease and convenience for the customer to make payments. Accepting eChecks means a whole lot more customers who may not be using debit/credit cards or other digital modes of payment.

7. When you pay the fee for the transaction
The transaction may be paid by the payer or the payee. If you’re paying it then go for eChecks as the transaction fee for eCheck processing is lower than any other payment method out there in the market.

8. When you want to play it safe
Most eCheck service providers do not charge any set-up fee. The best part is that you make up your mind, call up a service and they hook you up with the eCheck payment system almost instantly.

9. No devices required
eCheck processing does not need any gadgets or devices like POS machines etc. So you don’t have to worry about spending money on those machines and setting up which is perfect for small businesses.

We have mentioned lots of advantages of eChecks between the lines in the text written above. However, there are still a few left to point out. We will reiterate all of them here for your information. eChecks have the upper hand when it comes to safety, ease and transaction fees. Well, what more could a business ask from a payment method? Find out:

1. SAFER TO USE
eChecks are safe when it comes to processing high-risk payments. They are also less prone to fraud and cyber intrusions. They offer breathing space both to customers and the merchant and keep security risks at a minimum.

2. GREATER ACCURACY
eChecks are accurate since they are verified at several levels of the transaction cycle. In case of faulty data or discrepancies, they can be promptly cancelled or withdrawn from payment.

3. SPEED OF TRANSACTION
eChecks are quick when merchant payouts are considered and they are also a fast way of transacting international payments which is very beneficial for payouts of eCommerce businesses.

4. LOWER TRANSACTION FEES
eChecks have the least transaction fees when it comes to processing payments. They provide a win-win scenario for both customers and the business owners irrespective of who is paying the transaction fee.

5. USER FRIENDLY
It is very simple to fill out a paper check, eCheck are even easier. Users find themselves at ease when paying through eChecks mostly because they are convenient and very user friendly modes of payment.

6. ECO-FRIENDLY
Think of the millions of trees you are saving which would otherwise have been chopped to print those paper checks. This method is not only eco-friendly but a sustainable one too.

7. LOW RISK
eChecks are low risk considering the fact that they are verified and authenticated at several stages. You can carry out those high risk or large volume transactions via eChecks without worrying about a thing.

8. ZERO SET-UP FEES
Most eCheck service providers do not charge any set-up fee. The best part is that you make up your mind, call up a service and they hook you up with the eCheck payment system almost instantly.

9. HASSLE FREE
Conventional checks required a lot of lifting and transporting between different areas but that’s not a problem with eChecks. The system is totally digital. Ready to rule the world of payments.

Theft of account and routing numbers from the invoices or  eChecks is the most common type of fraud associated with eChecks. Malicious players can steal important data from users and misuse this data to create fake eCheck profiles. In this regard the ACH (Automated Clearing House) network that processes eChecks can also be compromised by cyber attackers to steal private information and siphon off funds from the accounts of unsuspecting users. Checking account number and a routing number are the two key pieces of information required by cyber thieves to execute their theft. Criminals obtain these details by phishing users into installing a malicious software which also installs keylogger onto their systems. Hundreds of millions US$ are stolen every year this way.

Detecting & diffusing frauds
Users will always remain at risk from phishing attacks and thus the strongest defense against such attackers is to stay alert and wary of fraudulent emails. Watch out for any suspicious activity and do not get caught into the trap of fraudsters. If there is a  transaction or deduction in your account that you didn’t authorize, report it immediately so that such threats can be detected. Monitor and review your accounts everyday to become aware of any malpractices. ‘Filter’ and ‘block’ mechanisms to ward off malicious links and to block unwanted links must be applied to ensure an added layer of security. An active action by filing a police report must be taken once you discover a fraud in your account or in your organization’s transaction process.

You must be curious to know about the different types of fees associated with the eCheck payment system. How much does it cost to get eCheck for your business? Find out here,

Setup fee: A minimal eCheck setup fee to be paid only once. Some organizations like us also offer free/zero setup features to promote the acceptance of this mode of payment.

Monthly fee: A minimum fee charged on a monthly basis for availing eCheck services on your business website.

Per transaction fee: A percentage of the transaction amount is charged as the transaction and it depends on the amount of transaction. Usually it is considerably low in comparison to the transaction fee charged for debit/credit card processing services.

Chargeback fee: This is the fee charged for each chargeback (fee for incomplete/canceled or refund transactions).

Some businesses are considered high risk in nature, this includes the adult-oriented industry, eCommerce, tech support services industry and a few other notable businesses. Due to their nature they are called ‘high risk businesses’ with no fault of their own and it becomes really tough for these businesses to find a reliable payment processing system. At these times, eCheck comes to rescue these businesses. For this reason several high risk merchants prefer eCheck as a payment system for their trade. This is due to a number of advantages like low processing fee, safety from high risk payment methods like debit/credit cards etc. and to offer the customers an easy way to make payments. Most of the people who do not have cards can still pay via eChecks. They offer faster and cheaper processing to merchants and make the job easier on both ends.