What Is An eCheck?
E-check or electronic check is a type of payment made possible by the internet. To simply put it, eCheck is the electronic version of the paper check. With an eCcheck, payment is transferred electronically from the payer’s account into the seller’s account. Essentially, eChecks are designed to function as a conventional paper check but in a seamless and digital rate of payment and transaction. Since it is in the form of an electronic check, there are fewer steps involved in its entire process.
Choosing an eCheck payment option means that there is an added layer of security without compromising the process of transferring payments. As such, electronic checks combine a secure, fast, and efficient transaction. More than this, eChecks have more security features compared to conventional payment checks. Some of these salient features include authentication, digital signatories, encryption, and others. Consequently, eCheck payment is the best of both worlds when it comes to a faster and less expensive way of receiving your money.
How Does an e-Check Work?
Aside from the fact that eChecks have expedited the transfer of payments, eChecks also work in a seamless and simple manner. Here, the customer’s routing and account number is needed to be submitted electronically which is then transferred to a bank in order to start the entire process of electronic payment.
Essentially, eChecks start with you. Initially, you need to collect an eCheck payment from a customer. After which, an authorization is sent to you from the customer. Consequently, an eCheck processor bank is directly connected to the eCheck processor. Now, the processor will receive all the necessary information such as the transaction date and the authorization from the customer. After which, the processor will forward it to the customer’s bank.
Then, the customer’s bank will receive all the details of the transaction from the eCheck processor. Both the customer’s bank and the processor communicate to verify and check the submitted information. Here, it is vital that the information from the whole transaction is correct and valid. Essentially, the entire process takes about three days upon completion. After this verification process, the bank will post the customer’s payment in their account. By the following day, the transferred funds are typically available for withdrawal.
As electronic commerce is gaining momentum, electronic checks have been developed to respond to this growing industry. Eventually, in an eCheck payment, there is no need for expensive scanners or any type of hardware. Here, you just need to key in your bank account information and submit these details for the transaction. Also, the receipt of your transaction is automatically sent to your email which eliminates the hassle of keeping paper invoices.
When Can You Use an E-Check?
E-Check payment is commonly used for high-cost items. Some of these items include rent, mortgage, car payment, and monthly payments such as retainers and fitness memberships. Essentially, you can use an e-check to make a payment for a transaction that a paper check also covers. E-checks are governed by the same laws that apply to conventional paper checks. As a matter of fact, the U.S. Treasury legally recognized eCheck payment as a form of internet-based payment used in transacting high-cost and large online payments.
Essentially, opting for an eCheck payment means that you just need to pay a smaller fee in processing your eCheck payment compared to credit card payments. This is the very reason why merchants and business owners often use eCheck payment as this is a less- expensive way of sending and receiving money. Also, the fact that the transaction is fast and efficient, eChecks appeal to more people when they plan to send and receive payments.
How Does a Business Accept an eCheck?
E-checks are commonly used by various businesses because of the fast and reliable transactions they can amass. Essentially, businesses save the cost of hiring employees to process payment checks. Also, it saves them time and money to purchase checks and mail them out on a regular basis. E-checks benefit businesses in a way that it lessens the possibility of lost mail as the transaction is done electronically. Businesses can track and see to it that no payments are delayed and the transaction is smooth and seamless.
Businesses accept an eCheck by obtaining the customer’s banking information. Here, the customer’s bank routing and checking account numbers are secured first in order to continue the process of eCheck payment. Essentially, this information is sent by phone, online transaction, or either paper form. In any way, a customer’s banking information is needed by a business in order for them to accept and process electronic checks.
Are E-Checks More Secure Than Paper Checks?
E-checks are more secure than paper checks in a way that the transaction is done electronically. More than this, another advantage of eChecks lies in the fact that they cannot be stolen from someone’s wallet or mailbox. As the transaction is purely digital, everything is kept and tracked electronically. Unlike paper checks, a bank needs to verify the account first which puts all of the deposit on hold.
Additionally, funds from eChecks are readily available. The customer can check online and track if a direct deposit is sent to their account. E-checks undergo strict encryption and routing information which then lowers the incidence of fraud and other misdeeds.
What Is the Best Example of an E-Check?
One of the best examples of an eCheck is the direct deposit paycheck. This type of eCheck payment is commonly used when employers pay salaries to their employees. In turn, this allows employees to easily set up an automatic savings plan. As the funds are readily available and incidences of fraud and theft are eliminated, direct deposit is the most frequently used type of eCheck payment offered by employers. Now that there are health and safety concerns tied with personally going to a bank to cash in and withdraw money, the eCheck payment option guarantees a contactless transaction without compromising the security and efficiency of the entire payment process.