As a business owner, you want to find new ways to streamline your payments. With that in mind, you may be wondering, “what is an electronic check, and should I be using them?”
That’s what we’re here to talk about today.
Electronic checks, also known as eChecks, are a form of electronic payment processing. This digital solution can save you time and money, making payments more manageable for your customers and employees.
In this blog post, we’ll answer the question, “what is an electronic check?” We’ll discuss how eChecks work, how they’re different from other online payment options, and why you need them for your business.
Let’s dive in.
What Is an eCheck?
If you’re wondering, “what is an electronic Check?” you’re not alone. While many people are familiar with paper checks, eChecks can be confusing.
Even if you’re comfortable sending and receiving online payments, it can be hard to understand the ins and outs of eChecks.
Here’s the bottom line:
An eCheck or electronic check payment is a digitized version of a traditional paper check payment.
Today, eChecks are sometimes called internet checks, online checks, or direct debits - the latter because eChecks use the Automated Clearing House (ACH) network to directly debit the payment amount from the payer’s checking account and credit it to the payee’s bank account.
A note on the ACH: The ACH is a major electronic funds transfer system in the United States. It processes transactions for businesses, consumers, and governments nationwide. Most electronic check payments transferred over the ACH network can take up to 72 hours to show up in the receiver’s account. However, with SeamlessChex’s eCheck processing platform, merchant account holders see fast, next-day deposits of customer payments.
Today, eChecks are a cheaper and more reliable alternative to paper checks. Not only is ordering a paper checkbook relatively expensive, but paper checks are very time-consuming and inefficient.
Because of this, more businesses are moving to newer forms of online financial transactions, including electronic check payments.
Which Businesses Use eChecks?
Electronic check processing is a must for anyone who does business online. That’s because eChecks are fast, efficient, and secure – all things that are important to you and your customers.
Plus, eChecks are a great way to streamline and speed up your payments. So if you’re not already using electronic checks, what are you waiting for? Give them a try today!
Here are just a few types of businesses that need eCheck processing:
- Any business that wants faster, more secure payments.
- Companies that operate online.
- Businesses that want to save on credit card processing fees.
- Businesses that deal with high-cost items or monthly fees.
If you’re still wondering, “what is an eCheck?” know that they are some of the best new methods for sending and receiving payments.
Contact us to get started processing eChecks today.
If you’re worried about how eChecks will impact your cash flow, follow our guide for tips
3 Reasons eChecks Matter
As a business or service provider, you might wonder what an eCheck payment offers, compared to other forms of traditional and online payments:
Here’s a breakdown of the perks of using eChecks:
eChecks offer built-in measures to keep payments secure. You’ll never have to worry about payment information breaches or bad actors intercepting your financial information.
You get secure authentication and public-key cryptography when you use eChecks.
Some people who are moderately familiar with eChecks ask, “what is an eCheck digital signature, and how does it help security?” Put simply, the digital signatures associated with eChecks help prevent problems with duplication and ensure that all certification authorities are properly contacted.
Today, eChecks improve the purchase and transaction experience for customers. This is a big deal, considering that retail e-commerce revenue in the U.S. is expected to amount to over $563 billion by 2025.
According to the U.S. Census Bureau, e-commerce sales made up 14% of total sales by the end of 2020, an increase of over 32% from the year before.
eChecks have more features than paper checks. Notably, eChecks reduce the risk of fraud by automatically validating all critical information.
Don’t worry - eChecks also offer all of the traditional checking features you know and love. With eChecks, you can still stop payments and easily reconcile payments. You’ll also find that dates are more accurate, which allows you to know exactly when you (and your vendors) can expect payment.
The beauty of eChecks is that they can be used by anyone in any business - large or small. No matter what your needs may be, digital checks are a great option when you have to securely and quickly settle financial obligations.
How eChecks Work
Electronic check payments work more or less the same way as paper checks, except that the process is much faster.
With traditional checks, you usually have to wait for them to arrive in the mail, then deposit them and wait for them to clear the network.
Fortunately, eChecks help shorten that process by allowing you to complete all the steps digitally.
Here’s a brief primer on how eChecks work:
Step One: Authorization
To begin, the payer or customer needs to authorize the business to charge electronic check payments.
This process requires obtaining a customer’s checking account and bank routing numbers.
It can be done in a number of ways, including by filling out an online form, completing a signed contract, initiating a phone call, or accepting terms and conditions on a website.
Step Two: Payment Processing
With the authorization in place, you only need to enter the payment amount and leave the rest to your online payments processor.
If you have a recurring payment schedule set up, you can skip this step.
If you’re not using a payments processor, your customers must manually enter the dollar amount and correct account numbers each time they want to make an electronic check payment. In addition to being time-consuming, this leaves significant room for error.
Step Three: Verification
In this step, the payment request undergoes a verification process to ensure the account and bank routing numbers are accurate.
This process is handled automatically by your payments processor or personally overseen by the payee or your customer.
If everything checks out, the ACH system processes the transaction and transfers the funds.
Step Four: Fund Credit
The final step in the process is the funds showing up in your business bank account after a successful transaction.
While this can take a few business days, advanced payment processors like SeamlessChex offer next-day funding for your receivables.
Both you and your customer will receive a confirmation once the electronic check payment is completed.
Why Choose SeamlessChex as Your eCheck Provider?
Suppose you’re a business owner who wants to start using electronic checks. In that case, the next step is to find a payment processor that offers eCheck processing.
There are many processors to choose from, but your company needs the expertise of SeamlessChex. At SeamlessChex, we walk you through the process of setting up eCheck processing for your business.
We also use 128-bit SSL encryption to ensure that no one other than the authorized parties can intercept the digital payment. This encryption also allows for instant balance verification, eliminating the possibility of bounced checks and all the headaches that come with them.
Additionally, we help you save on expensive credit card fees with a flat pricing system. This is perfect for businesses with recurring or high-volume transactions.
If you have more questions about how eChecks work or the benefits of electronic check payments for your business, don’t hesitate to contact us. We’re happy to help.