A Step-by-Step Guide: How to Send & Receive Electronic Checks
Over the past year, e-commerce is something that many prospective business owners have turned to as a way to achieve financial freedom and stability. More and more people are figuring out how to accept electronic check payments and other important factors of setting up online storefronts as their industry evolves. Many of those who had previously relied on in-person shopping have also turned to e-commerce as a way to keep their customers safer while they shop.
Statistics show that bank transfers remain a highly popular payment method among online shoppers, with up to 20% utilizing some form of bank transfer for online purchases. If your business offers an e-commerce function, it’s crucial that you facilitate as many different types of bank transfer options as possible to increase user experience sales.
One of these methods is electronic checks. Learning how to accept electronic check payments can be extremely helpful for your business because they offer a number of benefits to users, such as reduced transaction fees and high levels of security. Therefore, if you are a retailer or a consumer, it is in your best interest to be able to send and receive checks electronically.
Fortunately, it is very easy to learn how to use electronic checks, and we are about to walk you through all of the steps below. Read on to find out more.
The Benefits of Electronic Checks
Electronic checks, also known as e-checks, are digital replicas of paper checks. However, unlike their physical counterparts, they offer a few additional benefits. Why should you learn how to accept electronic check payments? The benefits of e-checks make them an attractive payment option for many. They include:
- Enhanced security: digital checks run on the Federal Reserve Bank’s Automated Clearing House (ACH) system, which makes them one of the most secure forms of payments available today.
- Reduced fees: electronic checks typically attract lower fees than many other forms of online payments and bank transfers.
- Fast clearing: because e-checks do not have to be manually processed, they typical clear much faster than physical checks.
- Geographical freedom: unlike paper checks, electronic checks can be utilized anywhere, at any time, facilitating transactions that are free from geographical constraints.
E-checks are also easy to use. But what do you need to do to get started when you’re interested in discovering how to accept electronic check payments?
E-checks are also easy to use. Let’s take a look at what you need to get started.
How to Get Started
If you are a retailer who would like to offer electronic checks as a payment option for customers, you will need to sign up with an e-check processing service that will facilitate the process. If you are someone who wants to send e-checks—and why wouldn’t you, considering the low fees and high security—the same applies to you when learning how to use electronic checks. While you may be able to make certain payments without a processing service, the easiest option is to sign up with a payment service that will streamline the e-check process for you.
Whether you are a consumer or a retailer, before you settle on a service, ensure that you check their reviews, as well as their website security authentication. This is displayed as a small green or grey padlock symbol next to their URL at the top of your search engine.
Receiving Electronic Checks
As a retailer, you have the option to receive both e-checks and paper checks (something you may not be aware of when first discovering how to accept electronic check payments), which you can then process electronically.
For electronic checks, you will need to set up an account with an e-check payment processing platform. From there, you can utilize features such as email links through which customers can pay, or cart payment options such as e-check payment buttons.
For the electronic receiving of paper checks, you can opt to purchase processing hardware in the form of scanners instead, which will automatically convert a paper check and the information it holds into digital form, which can then be processed by your bank through the ACH network.
Sending Electronic Checks
Sending electronic checks is very simple. Let’s take a look at the steps involved in this process before we dive further into how to accept electronic check payments for similar forms of payment.
Step 1: Filling out the Online Form
The first step of how to use electronic checks is to require the payer to fill out an online form with the necessary details, such as your bank’s routing number and your account number. This form will come via an emailed link, or via an e-commerce electronic check payment button.
Step 2: Providing a Digital Signature
After this, the payer will need to provide their digital signature if it is asked for. The payer must ensure that they type their name as it appears on their bank card.
Step 3: Submitting the Payment
The last step is to submit the payment, after which it will undergo any checking processes and be transmitted through the ACH network. The funds will usually be deducted sooner than with a physical check. Therefore, the payer must ensure that they have sufficient funds in their account at the time of the purchase/payment.
Electronic Processing of Paper Checks
Interested in learning more about how to accept electronic check payments from paper checks? Follow these steps:
Step 1: The Payer Writes out the Paper Check
Firstly, the payer will need to write out the check for the payment, and in some cases, supply their identification.
Step 2: The Payee Scans the Check
The payee will then need to scan the paper check through their hardware. This will convert the paper check into an e-check, after which it will go through the necessary automated channels.
At this point, depending on the options the retailer has, they will be able to verify whether the check is likely to be valid, based on automated checking processes that can access the payer’s account information.
Step 3: The Money Is Transferred, and the Paper Check Either Remains with the Payer, or with the Payee
After this, the payment enters the transfer process. The paper check is then voided and is either kept by the payee or returned to the payer along with their receipt. And that’s it for how to use electronic checks!
Using Electronic Checks Is Easy, Cheap, and Extremely Safe
Thanks to their basis in the Federal Reserve Bank’s Automated Clearing House (ACH) system, as well as their underpinning legal infrastructure and process inherent to regular checks, electronic checks offer high levels of security. They are also cost-effective and easy to use, allowing for both onsite processing of physical checks into e-checks and the processing of virtual e-check payments that are not restricted by geographical location.
In short, learning how to accept electronic check payments can be invaluable to any business owner as e-checks offer all the benefits of traditional checks along with the flexibility and ease-of-processing of online payments. This makes them an attractive solution for both retailers and consumers.