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Credit Card Processing
May 20th, 2019

eCheck/ACH or Credit Card- Which Makes Better Choice For High Risk Businesses?

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Every smart merchant minds the funds coming in and going out. There is no denying that electronic payments in the current business scenario hold a very crucial position. But does that mean merchants shall depend on credit card payments only? Well, some of you may have already heard of eChecks and their benefits. But very less number of businesses worldwide has taken up ACH payments as their primary mode of money transactions.

Do High Risk Businesses Need Alternative Electronic Payment Method?

eCheck payments are undisputedly important to every business but if you are selling products or services that fall in high-risk category you ought to consider them over and above credit card payments. Before we take you to the pros of accepting payments through eChecks/ACH network, it is important to understand the challenges high risk merchants encounter with their credit card processors. If you yourself are a high risk merchant then you may already know that how difficult it becomes to avail credit card processing services.

High risk business owners have to display a long trail of clean processing statements, high application fees, high monthly fees and that is not all about it. There are a lot more hindrances that come in the way of buying payment processing services. You can say that it just begins here and it has no end but a simple and safe alternative- eCheck payment processing.

Businesses like cryptocurrency trading, gambling, nutraceuticals and many more are restricted to buy credit card processing services. Also, if you are fortunate to get credit card processing services for your business you may not be lucky enough to sail smoothly. You will have to be extra attentive towards chargebacks because that might cost you processing ability. You, of course, do not want to see your business getting paralyzed.

What Is An eCheck And How Does It Differ From ACH?

An eCheck or electronic check is electronic version of a traditional paper check. Using it for making or receiving payment is simple and easy. These transactions are obviously internet based transactions. eCheck payments are processed using the ACH (automated clearing house) network. Also by ACH payment, it is referred to the financial transaction that is initiated by the buyer. On the other hand, when it is initiated by you it is an eCheck payment.

In other words, if you are the payer you are making an eCheck payment and if some other party is paying to you, it is an ACH transaction.

Which Ways Chargebacks Can Be Best Handled?

High-risk merchants who accept credit card payments would be very well familiar with the below discussed things.

High risk business encounters chargebacks as a part of routine. Sometimes you are tagged as a high risk business because of the industry you are a part of. Whatever is the reason behind your naming as a high risk business, dealing with chargebacks is a major issue. When you accept credit card payments from your customers you are highly vulnerable towards chargebacks. Owing to the chargeback, a high risk merchant goes through a lot like raising the matter with the buyer’s credit card issuing bank. No matter what the result is you are always charged $50-$100 for every single chargeback since you are the business and you are labeled ‘high-risk’. This gets recorded so that you get further more notorious for new customers and new processors. The end result is your product is sold without giving you a single penny or it might have earned you losses and you are more likely to lose your ability to accept credit card payments.

Payment Scenario Changes 360 Degrees When You Accept eCheck(or ACH) Payments

High risk businesses suffer a lot because of the frauds that are invited to their business type. But that is a thing of past with eChecks as these payments are absolutely risk-free. When it comes to chargeback prevention industry insiders suggest relying upon this simple, safe and fast electronic payment method.

It is one of the finest kinds of electronic money transfer methods. Besides being highly convenient for both the parties they don’t bring high costs to business owners. This might surprise many of you but there are no chargebacks. Scammers behind the face of customers can no longer hide themselves behind Visa/MasterCard consumer purchase protection policies. With eChecks buyers have to take complete ownership of their purchase. Whatever risk is involved is on the buyer and not the seller or merchant.

Perks Of eCheck Payments

Many merchants especially those falling into high-risk category consider eCheck payments as a dream come true.

  • It does not take too long to start with eCheck processing services because of quick approval.
  • The monthly costs involved are too less just like the cost per transaction.
  • There is no risk involved for chargebacks.
  • Funds are received in your account within one day.
  • When you accept online checks you are free to make or receive payments even from a remote location.
  • It is hassle free as neither of the parties visits their banks.
  • Cutting down on errors as the form is filled online by the payer only.
  • It is not handled manually so chances of fraud are too less.

How Do You Get Started With eCheck Payments?

Echeck processing is quite similar to credit card processing. It works both ways when the merchant accepts payment over phone via mail or email the merchant enters customer’s echeck information into online portal. On the other hand, when customer purchases merchandise from business website they add their information after using “add to cart” or “buy it now” buttons. After the information input is done, payment processor verifies the account details and checks for sufficient funds in the customer’s account. It typically takes one day to gets funds transferred into the merchant’s account.

Smart merchants count on eCheck payments for paying rents, buying memberships and more. When you know it does not take anything to apply what you are waiting for, eCheck services are definitely your best friend.


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