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EChecks are increasingly a preferred mode of accepting payments for businesses in the U.S. If you’re unsure of how eChecks work, they’re essentially digital alternatives to paper checks that are generally easier and cheaper to operate with.
EChecks processing was introduced with the Check 21 Act in 2004 as a means to cut short the lengthy deposit and processing times for paper checks, as well as reduce paper waste. They’ve since made a great impression with the convenience they’ve facilitated for businesses and individuals nationwide.
Payments by eCheck are made via the Automated Clearing House (ACH) network which processes transactions throughout the U.S. It can take up to 48 hours for the ACH to clear fund transfers at pricing determined by the bank or provider you’re using.
Businesses are switching over to eChecks because of how much quicker they’re able to receive customer payments, but also because of how much cheaper it is to do it by way of eCheck, as opposed to credit cards and other Electronic Fund Transfer (EFT) mechanisms. With the right payment processor, you can make huge savings on your payments. With Seamless Chex, for example, there’s a low per-transaction funds transfer pricing to accept eChecks.
Think about everything that goes into processing paper checks. Your customers have to write them out accurately and legibly and send them over to you by post. Once they finally arrive, your employees have to look them over to ensure they’re correctly filled out, then go and manually deposit them. When you consider the time it takes for the eChecks to arrive and the monetary value of the time it takes your employees to deposit them, eChecks begin to appear a much more viable alternative to paper checks. This doesn’t even take into account the cost to reconcile and track paper checks, which can be very costly and time-consuming.
The beauty of electronic checks is that their funds transfer pricing is often quite low, not just compared to paper checks, but nearly every other EFT method as well.
EChecks vs. Credit Cards
As a business, you’ll be well aware that credit cards currently dominate the payment landscape. Even though debit cards directly deduct the payment from your bank account, they use the same network to function as credit cards. This, incidentally, is not the ACH network but a separate network managed by card associations like Mastercard and Visa.
While credit cards are a necessary tool for you to conduct business, they also come with costly interchange fees. Consider the funds transfer pricing on, say, $10,000 worth of sales a month. Your credit card fees amount to 2.75% of the transaction value plus $0.15 per transaction. This means you pay out anywhere between $300–$400 depending on how many transactions you’ve accepted. Seamless Chex’s eCheck platform can cost you as little as $24.99 a month.
EChecks vs. Wire Transfers
Funds transfer pricing for a wire transfer within the U.S. usually amounts to anywhere between $20–$30. There’s normally a fee to receive one as well. Although wire transfers happen fast and you can expect to see the money deposited in a few hours, it’s a tremendous burden on the sender and typically only used for very large transactions.
EChecks vs. ACH
The ACH network is the most popular way for banks to transfer money amongst themselves. As a payment mechanism, ACH transactions can vary in cost, depending on the bank or provider you use. An average cost of around $1 or 1% per transaction for a minimum of 100 transactions or $10,000 worth of sales value will still cost you $100 a month. Some providers will even have hidden fees you’re not immediately privy to. An eCheck funds transfer pricing of $25 definitely compares favorably to that.
While they’re obviously cost-effective, eChecks hold a number of other advantages for businesses as a payment instrument. They’re a highly secure channel to transfer funds, and you can’t misplace eChecks in the mail, making them a naturally safer alternative to paper checks. They leave a digitized record through your bank and can be tracked. As an EFT mechanism, they also employ 128-bit SSL encryption so that no one other than the involved parties has access to the exchange of information. The Seamless Chex eCheck processing platform also allows for instant verification of bank balance, so as to prevent bounced checks and provide rapid next-day funding.
Sign up for a free 14-day trial of Seamless Chex to start saving money today. Feel free to reach out to us as well with more questions about the benefits of eCheck funds transfer pricing. We’ll be happy to clarify them for you.