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.