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April 19th, 2019

6 Most Sought Questions (With Answers) With Electronic Check at Their Heart

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Getting paid is by far the number 1 priority of every merchant. But at the same time, merchants have to ensure that the payment options are convenient and safe for their customers. Otherwise losing business to competition becomes a norm for merchants. Collecting eChecks from customers supports a business as the procedure is really simple, fast and safe. For merchants who want to start collecting payments through eChecks but have doubts and hesitations, we compiled a list of questions and answers.

A thorough reading of this article will pacify all possible queries.

What Is An eCheck?

eCheck or electronic check is the digital format of paper check. It makes electronic money transfer from the payer’s checking account to payee’s checking account through the ACH network. It helps businesses withdraw payment from customer’s bank account and depositing into their account even without having to visit the bank. Though both the parties involved in the transaction are saved from trip to their respective banks, payment is approved only after getting authorization by the customer.

How Is eCheck Processed?

Electronic check processing is not very different from paper check processing besides being fast. As it does not require a customer to manually fill the check and send it to the business, it happens at a much quicker pace. It saves both time and paper.

Main steps to processing an electronic check:

1.Request Authorization: A business accepting eCheck payments needs to gain authorization from the customer for initiating the transaction. This can be done either online or signed order form or through telephonic conversation.

2.Payment Set Up: One authorization is done, the merchant feeds in the payment information in the software for online payment processing. If it is a recurring payment, of course details will be filled in at this stage.

3.Check And Submit: After properly filling in the information, the business owner either saves or submits the fed information and commences the ACH transaction process.

4.Payment Confirmation and Funds Deposited: Once the above steps are completed, payment is automatically withdrawn from the bank account of payer (customer) and the same is deposited into the business’s bank account. It typically takes 3 to 5 business days post ACH transaction initiation.

How To Differentiate Between ACH And EFT?

While EFT stands for electronic funds transfer, it is an umbrella term for many kinds of financial transfers such as wire transfers, direct deposits, electronic benefits payments, ACH disbursements etc.

ACH on the other hand is the abbreviation for “automated clearing house.” ACH refers to the electronic network used by financial institutions across the United States. This network provides the infrastructure used by payment processing businesses.

Relation between ACH, EFT and eCheck can be best understood with the statement- an eCheck is one kind of electronic funds transfer and it uses the ACH network for payment processing.
Which Kind Of Businesses Can Accept Payment Through eChecks?

Many merchants who still do not have set up eCheck merchant account must be concerned about whether they can accept payment via eCheck or not. Every business that can manage to open a merchant account can collect eCheck payments. Since processing fee for eCheck payments is much less than credit card payment processing, they can be used to pay rents, mortgage or car payments, and other expensive high-cost monthly fees such as fitness memberships.

How To Obtain An eCheck Merchant Account?

The process of obtaining an eCheck by a merchant is quite similar to that of signing in for a merchant account for card payments. A business needs to find the most suitable merchant account provider and help them with important information such as:

  • Federal Tax ID
  • Years in industry
  • Expected processing volumes

The approval does not take too long; a competent merchant account provider can get approval in some days.

Why A Business Should Prefer Accepting eCheck Payment?

eCheck payments are easier, faster and safe but who does not want little more elaboration of the benefits associated with eCheck payments?

1. It is Cheaper

Processing fees of eChecks is comparatively less than card processing fees. While it depends on the eCheck merchant account provider, the average fees for each eCheck transaction ranges between $0.30 to $1.50.

2. It is Faster

Besides being a cheaper option for merchants it does not involve too many steps to consume precious time of the merchant or customer. Its processing time is less and hence, business gets faster payments and cash flow is better managed.

3. It is Hassle-Free

Payer or payee, no one is expected to visit bank for making or collecting payment. The online software facilitates convenient transaction between two parties.

4. It is Error-Free

Since the information is input by the customer itself, there are negligible chances of having errors in the checks.

5. It is Environment Friendly

eCheck is a digital or electrical form of check which saves wastage of paper.

6. It Can be Used for Recurring Payments

Unlike paper checks, their electronic counterparts have the provision of making recurring payments. For example, merchants can make rent payments with eChecks. Every month on the same date their account can get automatically deducted for the same amount of rent. It is a smart way of avoiding chances of missing on important payment dates.


It is completely worth it for every business to find an authentic eCheck merchant account provider. eChecks being the most cheap and easy way of accepting payments offer a business plethora of advantages.

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