5 Things you need to know about electronic checks or eChecks

Sep 11, 2015

1.      What is an eCheck?

An electronic check (also known as an eCheck or a Back Office Conversion (BOC)) is an electronic version of a paper check. As technology changes the way things are done, people saw the need to convert traditional checks into electronic payments that can be processed through Automated Clearing Houses (ACHs), easily and efficiently. Since electronic checks have more security features compared to paper checks, they are safer to use for business payments – protecting both you and your customers.

2.      How do the checks work?

There is nothing complicated in how electronic checks work. It all starts when you run a customer’s paper check through an electronic scanning system that you can find from merchant service providers. The scanner will capture the customer’s banking information and the amount payable. Then, this information is sent to the Federal Reserve Bank ACH network electronically. The ACH network in turn takes the funds from the customer’s account and deposits it in your account. When the payment is completed, the virtual terminal will print a receipt which the customer signs and keeps. That’s pretty much the how eChecks work.

3.      What is ACH and how does it make eCheck payments possible?

The ACH is a network that helps to distribute funds electronically among users. It’s a very reliable nationwide network governed by the Federal Reserve (Fed) and NACHA (the National Automated Clearing House Association). The main benefit of using ACH networks rather than traditional paper checks is the greater speed of transactions. Since the network allows for electronic transfer of money to and from banks, it is very swift with very few delays if any.

4.      What are the advantages of eChecks?

eChecks are beneficial in several ways;

  • They reduce processing costs by more than 60%
  • The process is much faster than traditional paper checks
  • It expands your payment options which could lead to increased sales
  • It is a green option; say no to paper pollution
  • Guarantees minimal errors and fraud. To further protect your business, use;
    • Authentication,
    • Duplicate detection, and
    • encryption

5.        How do I get started with eChecks?

  • How do I get started with eChecks?
    Start by finding an experienced and reliable electronic check processing provider. Then notify your customers that you’re now accepting eCheck conversions. And, that’s it. Get ready to see more customers who enjoy electronic transactions.

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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 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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