12 Popular Questions (and Answers) About eChecks

Jan 05, 2022

As more consumers are growing weary of credit card fraud, they are less likely to use credit cards as a payment method when shopping online. They are looking for payment methods that offer more security, with a seamless, efficient, and fast processing as a credit card payment.

Top 12 Things To Know About Electronic Checks

1. What Is an eCheck?

An eCheck is a type of payment where the money is electronically withdrawn from the sender’s checking account and then deposited into the receiver’s checking account. 

2. How Does It Work?

Similar to paper check processing, the biggest difference is that it’s faster and eco-friendly. No need to waste paper or time writing out a check. The client only needs to provide their information and the eCheck is processed electronically. 

3. How Do You Process An eCheck?

There are a few steps to process an eCheck:

  • Request authorization – A business needs prior authorization from the customer before an eCheck transaction is processed. This can be over the phone, a signed order form, or an online payment form.
  • Set up payments – Once authorized, an online payment gateway accepts the information on the payment. 
  • ACH takes over – Once the gateway receives the information, the ACH processing begins.
  • Confirm the payment – Funds are automatically withdrawn from the customer’s bank account. 

4. What Are The Benefits Of Accepting eChecks?

eCheck processing fees are considerably lower than credit card processing fees. This benefits merchants who sell high-cost items. 

5. What’s The Difference Between eChecks and Credit Card Payments?

eChecks use ACH in order to transfer funds, not the credit card networks. Processing fees are lower. There are no credit card interchange fees. 

6. Can I Use Them For Recurring Billing?

Yes. However, to set up recurring eCheck payments, you would need to contact your payment service provider (PSP). 

7. When Do I Receive My Funds From An eCheck Payment?

Depending on the PSP, it normally takes up to 48 hours. If the payer has sufficient funds to cover the purchase on their checking account, the merchant will get their funds within 3 to 7 business days. 

8. How Do I Send An eCheck Payment?

You cannot send an eCheck to whoever you choose, however, you can send it to someone who holds an ACH merchant account. This enables the merchant to use the ACH network to accept payments via electronic funds transfer. 

9. What Are The Processing Costs For An eCheck?

Depending on the business, there will be different fees charged for processing an eCheck. On average, an eCheck fee can range from $0.30 to $1.50.

10. Can An eCheck Bounce?

Yes, they actually can since the money is not withdrawn from the payee’s bank account right away. There may also be fees or penalties charged against the issuer of the eCheck just like with a bounced paper check.

11. Can I Cancel An eCheck?

It depends on two things: the payment system you are using and the stage of that transaction. If the payment has already cleared within your account, you can’t cancel it but can set up a refund. If still pending, it’s best to contact your payment processor for advice. 

12. How Do I Apply For an eCheck Merchant Account?

Similar to applying for a credit card merchant account. Once you found one, you will need the following documentation:

  • Federal Tax Identification Number (EIN)
  • Years in business
  • Estimated processing volumes
  • Other details to confirm business standing

The merchant account provider will review your information to determine acceptance. You should get an answer within a few days. 

eChecks Are Here To Stay

eChecks are another secure payment method to add to your current business lineup. As customers’ needs and preferences for payments change, it would be yet another great option that could secure you more customers for years to come. 

Let us help you get a high risk merchant account today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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