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12 Popular Questions (and Answers) About eChecks

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An eCheck is a type of payment where the money is electronically withdrawn from the sender’s checking account and then deposited into the receiver’s checking account. 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  • Confirm the payment – Funds are automatically withdrawn from the customer’s bank account. 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.