The Safety Of Accepting eChecks

Jan 25, 2022

The 2018 AFP Payments Fraud Survey uncovered that checks continue to be a target for more fraud than any other payment method. In fact, 74 percent of those surveyed revealed that they had experienced this attack. This was followed by wired fraud at 48 percent, and corporate card fraud came in third at 30 percent. 

A safer alternative to traditional paper checks is eChecks. They offer the same benefits and features of paper checks, but without the risks. 

What Are eChecks?

eChecks can be referred to as “virtual” versions of a traditional paper check. Although they work similar to paper checks, essentially transferring funds from one account to another, the difference is that the information on the check is processed online or over the phone. 

Another differentiation is that eChecks transfer their funds via the ACH network. With this process, eChecks also enjoy the benefits inherent to all other Automated Clearing House payments. 

With the ACH network, eChecks are processed considerably faster than paper checks. That means the funds will also appear on the merchant’s account even more quickly. eChecks can be used without face-to-face transactions and without the complications of sending a paper check by mail. 

More benefits for the merchants to accept eChecks include the inability of customers to cancel them. For paper checks, customers do have a few days to cancel before it is cash, but not so for an eCheck. 

Are eChecks Safe?

eChecks are known to be a safe method to include in a current lineup of payment methods. What makes them secure is that they have an authentication process, duplication detection, encryption, and digital signatures. All these features build a robust level of security that neither debit cards or paper checks can provide. 

Even when customers pay with credit cards, just the act of having that credit card in hand exposes them to more risk of theft. More individuals are also coming in contact with this sensitive card information. 

eChecks don’t have this problem as they use electronic processing. This makes them more secure than paper checks since forgery and identity theft are simply impossible to carry out with eChecks.

Both merchants and customers stand to benefit by using eChecks in their online transactions. Not only is it convenient, but the consumer is providing their banking information directly to the merchant. There is no need for shopping carts, card readers, or credit card machines. Fraudulent attacks are higher when these aforementioned tools are used. 

How To Get Started With eCheck Processing

To start accepting eCheck payments, take the following steps:

  • Set up an ACH merchant account

This will allow you to use the ACH network to withdraw payments directly from your customers’ bank accounts. In order to open a merchant account, you will need to provide a federal tax ID, the number of years in business, and an estimated processing volume. It can take a few days for approval. 

  • Request authorization from your customers

ACH billing does require prior authorization and therefore, a customer must authorize you to make an ACH (eCheck ) withdrawal. They can provide this by signing a contract or order form, turning in an online payment form, or giving authorization in a recorded phone conversation. 

  • Set up payment details

The customer can turn in an online payment form along with their checking account and routing number, the payment amount, and whether it’s a one-time or recurring payment. Or they can submit this information through a recorded phone conversation. 

  • Submit payment information

Once you click “Save” or “Submit”, in your payment processing software, it will begin the ACH transaction process.

The Bottom Line

eChecks are a safe and convenient payment method to offer your customers. Not only will it build and strengthen customer relationships, but it can also help increase your revenue.

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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