E-Check vs. ACH Processing: What You Need for Your Business

Jan 25, 2016

There are many ways to process payments. From mobile apps to traditional merchant account terminals, there are multiple ways for your customers to pay. However, while many think of the physical terminals or scanner when thinking of “payment processing”, there are two terms that you must know for your business: e-check and ACH processing. They essentially do the same thing by processing payments. It is these similarities that confuse merchants, and cause them to overlook their options.

Both e-check (electronic check processing) and ACH (Automated Clearing House) move funds from one account to another. With ACH processing customers use their bank account information to submit payments in the same for as a debit (since both come from a checking account). With e-check processing, the check is changed to electronic form, and then submitted. While ACH processing is essentially quicker and more familiar, e-check processing relies on the old-standard for check verification with the bank: signature verification. This has been around for decades, and is often how banks can prove a stolen check from a legitimate check.

For many, e-check technology is the superior option. Not only is it better suited for those who accept payments from mail order customers, but also it has newer capabilities than ACH processing. These capabilities facilitate direct customer-controlled funds transfers over the internet while providing tools to help curb fraud. Fraud is a huge concern with all merchants, and any step that a merchant can take to combat the risk is sought after.

Even though e-check processing is advanced technologically and has superior fraud protection, some do choose the quicker, long-tested ACH processing method. ACH processing has been around since the 1970s, and has been the top choice for many merchants ever since. The quick processing time is the biggest reason merchants choose this option, and once merchants get used to the quick turnaround, it can be tough to even consider choosing another processing method. The pros and cons must be weighed by any merchant, and while e-check looks to be the better option for many, it may not be the best option for you, especially if you are in need of a quick payment turnaround. Many weight the quick turnaround time with security, and this can be a huge struggle for many.

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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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