What Is an E-Check?
E-checks have become more commonplace as customers and merchants have embraced digital platforms, especially for processing payments. Businesses that accept e-checks are everywhere!
But what is an e-check, anyway? In this guide, we’ll walk you through everything you need to know about this online compensation method.
What Is an E-Check?
An e-check, or electronic check, is a digital version of a traditional paper check. It uses an Automated Clearing House (ACH) network, an electronic network used by US financial institutions, to directly debit payment from a customer’s checking account into a merchant’s banking account with help from a payment processor such as Seamless Chex. This allows money to be electronically sent swiftly and securely.
How do E-Checks Work?
E-checks work like regular paper checks, except everything is done electronically. Typically, someone would manually fill out a paper check and send it to the business they must pay. But with e-checks, all of that can be done online.
To process an e-check, the business first obtains authorization from the customer through an online form or phone conversation. Then, it inputs the payment details into an online payment processing software like Seamless Chex and runs it through an ACH. If everything looks good, the payment is deducted from the customer’s account and debited towards the business.
When this happens, the payment processor usually sends a receipt to the customer and a confirmation to the merchant. Funds may take a couple of hours to five business days to transfer.
Types of Payments You Can Make with E-Checks
You can make almost any type of payment with an e-check, but it’s mostly used for paying high-cost items like rent, mortgage, car payments, fitness memberships, and legal retainers.
That said, if you’re buying something online or paying for certain services that accept e-checks, you can pay for this with this method, as well. And because some businesses and payment processors charge a smaller fee to deal with e-checks, some merchants and customers prefer using it!
Sending and Receiving E-Checks
To send and receive an e-check, a business must have an e-check service like Seamless Chex that can process this mode of payment. This enables the merchant to obtain and verify the information to authorize the transfer of funds.
Additionally, a business must have an ACH merchant account, which allows them to use the financial network to accept money electronically.
What do you need for an e-check? To send an e-check payment, the payee collects the payer’s information, usually through an online payment form. Once the details have been checked and the payer agrees to the payment, funds are transferred as planned.
How can you accept e-checks? To receive an e-check payment, a business must work with a payment processor like Seamless Chex and a financial institution to facilitate the transaction. This involves installing and operating certain hardware and software.
Are E-Checks Secure?
While there are risks to sending money online, e-checks are generally a very secure form of payment. They’re even inherently safer than paying with paper checks.
This is because the processes of digital finances are always subject to strict consumer protections. Here’s a look into the five major security components for e-check transactions:
- Authentication–verifying account information to avoid fraudulent payments
- Encryption–“masking” sensitive data to protect it from data theft or breaches; includes public key cryptography and digital signatures
- Certificate authorities–issuing digital certificates to safeguard sensitive information and enable secure communication
- Duplicate detection–monitoring duplicate transactions and suspicious activity
Accept E-Checks Quickly and Securely with Seamless Chex
Seamless Chex is a full-service payment processing company that enables businesses to send and receive e-checks (plus ACH and credit card payments!) in a simple, affordable, and fast way. Partner with Seamless Check to streamline your online financial transactions today!