Avoid Credit Card Fees With Electronic Checks

Dec 07, 2021

First Data’s white paper, “Electronic Checks: The Low-Risk, Low-Cost Way To Accept Online Payments”, highlighted what drives customers to make their buying decisions. Payment options factored greatly in most customers’ decisions as to “where” they shop online.

For most consumers, a shopping experience may end unfavorably if they are not able to find their most preferred method of payment during the checkout process. An extensive amount of research has proven that when merchants provide customers with an ample amount of payment options, their sales online tend to increase. 

Although the predominant and most popular methods of payment consumers use are debit and credit cards, the percentage of those using cards is dropping. Many are simply choosing not to use credit cards as a form of payment. In answer to this, merchants are now beginning to accept alternative forms of payment, such as e-Checks

What Are E-Checks?

E-Checks are also known as online checks, electronic checks, internet checks, or direct debit. The way it works is that a customer is able to pay with the money in their checking account. There is no need to use a paper check or a credit card. All the customer needs to do is submit the checking account number and bank routing number.

The funds are then transferred by sending the transaction via the Automated Clearing House (ACH), which is an electronic banking network that is used for making direct deposits as well as electronic bill payments

What Are The Benefits For Merchants?

Merchants are able to enjoy many benefits when they choose to accept e-Checks for their business:

  • Boost in sales: Online customers shop where their preferred method of payment is used. If there is a limit in payment options or worse, they don’t have their favorite option, they will likely abandon their cart. 
  • Funds are processed faster: e-Checks are processed quicker than traditional checks. This greatly simplifies accounting and the process of reconciliation.
  • Lower costs for processing: The processing fees for e-Checks are considerably lower than card-not-present (CNP) interchange fees. Unlike credit card transactions, e-Checks offer a dramatic amount of savings in processing fees. 
  • Limited risk: Upon entering their checking account information, it is screened against a database of bad checks and other “risk assessment parameters”. Here, the transaction can be approved or denied instantly. 

The Impact E-checks Have On Revenue And Costs

The potential for amassing revenue is significant. While seventy-seven percent of consumers have debit cards and 72 percent have credit cards, almost 92 percent of consumers have a checking account. This means that a considerable portion of the population would benefit greatly from using e-Checks. 

E-Checks give customers an alternative payment method that is just as quick and convenient as credit and debit cards. 

The transaction processing fees for e-Checks are considerably lower than credit card processing expenses. Some of the typical credit card fees include interchange fees, charge-offs, and fraud prevention services. 

According to market research, online merchants can anticipate 3 to 8 percent of their sales to be paid for by e-Checks. Half of this amount consists of sales that would have been lost.

For the percentage of existing sales that are converted from bank card payments to e-Check payments, the merchant would save money on processing fees. This all depends on the average interchange rate as well as the terms of its e-Check acceptance service agreement. 

Bottom Line

Of all the ways that merchants try to retain and attract new customers, adding new payment methods to their repertoire seems to always be neglected as a key strategy for their e-Commerce business.

E-Checks are safe, easy, and more cost-effective than credit card processing. Merchants receive their funds quickly and it’s a great way to increase sales and their customer base. What’s not to like?

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.