eChecks are otherwise known as electronic checks. They are made from your checking account and they work similarly to regular checks. Instead of having a piece of paper, you will provide your information, including your routing number, payment authorization and bank account details through an online form. This allows your payment to be processed electronically.
Using a credit card for an electronic payment. Image credit: energepic.com via Pexels, free license
How Are eCheck Payments Processed?
eCheck payments are processed via the Automated Clearing House network. This central infrastructure works as a highway to move money electronically. eChecks can be sent faster than paper checks because you don’t need to pay any logistical overheads. Because you don’t have to deal with slips of paper, which can be lost, stolen or damaged, eChecks are seen as more secure.
Security measures are in place to prevent eCheck fraud, ranging from encryption to digital signatures and a solid authentication process. eChecks are particularly suited to online businesses; eCheck online casinos, for example, allow players to use eCheck to make deposits and withdrawals while protecting their bank details.
With casinos handling thousands of online payments per day, eChecks are a fast and efficient way to facilitate payments. Other sectors that use eCheck payments include membership businesses that require a monthly fee, or online retailers. As eChecks are so efficient and easy to adopt, it makes sense for businesses that need to accept lots of payments regularly.
For customers who want to pay via paper check, it’s sometimes possible to take a photo and upload it to the payment portal. The bank can initiate the ACH after “reading” the check digitally. Even by moving to eChecks, traditional payment methods are not overlooked.
E-shopping – illustrative photo. Image credit: Leeloo The First via Pexels, free license
How to Pay via eCheck
There are three main steps involved with sending eCheck payments. First of all, you have customer authorization. In addition to signing an online form, customers can also authorize the payment over the phone. Businesses can then set up either a one-time payment or a recurring payment, which is usually done through a payment processing system.
When the payment information has been received, businesses can submit the details through the ACH network so that the funds can be withdrawn and then deposited in the business’ account. The whole payment processing procedure usually takes between three and five days.
For businesses, there are many advantages to electronic checks. Electronic checks are far cheaper to process when compared to paper checks, not to mention that they are faster. You also have more options for back-office automation and more convenient payment experiences for customers. It’s also an easier process to carry out on a mass scale.
With the right software, businesses can arrange for customer’s direct debits to come out on the same day each month. The account authorization only has to be captured once as well. Cash application software can take the remittance files from the bank, using AI to match the payment manually with the correct invoice within the system.
With the world rapidly moving towards automation, accepting eChecks can help to reduce the manual labor involved with processing payments.