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Sending an Electronic Check with Instant Online Check Verification
October 10th, 2023

Sending an Electronic Check with Instant Online Check Verification

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The traditional paper check is one of the most trusted payment methods, as it’s been around for years. While the popularity of checks has decreased over the years, most people still use them as their mode of payment. However, traditional checks, now pose a unique challenge in the current contactless and digital environment. It requires time to process and clear funds. While the traditional paper check has been a trusted payment method for years, the rise of eCheck payment in today’s contactless digital environment offers speed and security, benefitting both customers and businesses.”

Understanding eCheck Payment:

A digital version of a traditional check is known as an electronic check. Using an eCheck, money is electronically withdrawn from the payer’s bank account, transferred to the ACH network, and deposited into the payee’s checking account.

The eCheck payments are processed through the “Automated Clearing House” (or ACH) network, an electronic network used by U.S.A. financial institutions. With an ACH merchant account, you can make transactions of goods and services with your business account directly from the customer’s bank account. Before making the payment, it should be authorized by the customer, either by a signed contract, acceptance of ‘Terms and Conditions’, or a recorded voice conversation.

eCheck v/s Credit Cards v/s Traditional Paper Checks:

AspecteChecksCredit CardsTraditional Paper Checks
NatureDigital form of a check.Plastic cards linked to an account.Physical paper checks.
Processing SpeedSlower, often takes 2-5 business days for clearance.Instant authorization, but may take a few days for settlement.Slower, requires physical mailing and processing time.
SecurityGenerally considered secure due to encryption and verification processes.Relies on card security features and fraud monitoring.Prone to physical loss or theft, easier to manipulate.
CostsTypically lower processing fees for businesses.Higher merchant fees for transactions.No direct transaction costs, but potential bank fees.
AcceptanceNot as universally accepted as credit cards but widely used for online payments and B2B transactions.Widely accepted online and in-person, internationally.Accepted everywhere paper checks are, but usage declining.

How do eChecks work?

The processing of eChecks is similar to paper check processing, just faster. The customer doesn’t have to go through a long process of filling out a paper check and sending it to the business they need to pay. The technology allows the process to happen electronically, saving time as well as affecting the environment in a good way. 

There are a few steps involved in the processing of an eCheck:

Step 1- Request Authorization:

Before e-check processing and making the transaction, the business needs to gain authorization from the customer. This process can be done via an online payment form, signed order form, or recorded phone conversation.

Step 2 – Set up Payment:

After the authorization process is completed, the business inputs the payment information into the online payment processing software. In recurring payments, the customer has to tell the details of the recurring scheduled payment, so the payment processor can include the details of the recurring schedule.

Step 3 – Finalize and Submit:

Once the information is properly entered into the payment software, the business clicks “Save” or “Submit” to start the ACH transaction process.

Step 4 – Deposit Funds:

The payment gets automatically withdrawn from the customer’s bank account while the online software sends a payment receipt to the customer, and the payment itself is deposited into the business’s account. The payment gets deposited into the merchant’s bank account in three to five business days after the transaction is initiated.

What is Instant Check Verification and How Does it Work?

You are a business owner or an individual who received a paper check as payment. You want to make sure that the check is valid and that the person who wrote it actually has enough funds in their bank account to complete the transaction. That’s where instant check verification comes in.

Instant check verification is like a safety net for check payments. It’s a real-time process that electronically confirms if a check is legitimate and if there are sufficient funds in the payer’s bank account to cover it. Here’s how it works:

Check Scanning:

You use special equipment or software to scan the check. This captures important details like the routing number, account number, and check amount.

Data Transmission:

 The scanned check data is securely sent to a verification service provider.

Database Query:

The service provider checks a database of bank account information to confirm the account’s validity, the account holder’s name, and whether there are enough funds available.

Verification Response:

In a matter of seconds, you receive a verification response. It tells you whether the check is likely to be valid and whether there are enough funds in the payer’s account. This helps you decide whether to accept the check.

Benefits of Instant Check Verification:

Faster Payment Processing:

With instant check verification, you can process payments quickly. You don’t have to wait for days to find out if a check is good or not. This means you get your money faster.

Reduced Fraud Risk:

It’s like having a fraud detector. By verifying checks in real-time, you can avoid accepting fraudulent checks or checks with insufficient funds. It keeps your finances safe.

Enhanced Financial Control:

You have more control over your financial transactions. You can make informed decisions about whether to accept checks or not, which can help you avoid potential financial headaches.

For businesses receiving eChecks, the process involves a few key steps:

Provide Bank Account Information:

As the payee, you need to provide the payer with your bank account details, including the routing number and account number. This information is essential for them to initiate the eCheck payment.

Receive eCheck Payment:

Once the payer initiates the eCheck payment, you’ll receive the payment electronically in your bank account. The funds will typically appear within a few business days, depending on the bank’s processing times.

Check Notifications:

Some banks and financial institutions send notifications or alerts when an eCheck payment is received. It’s a good practice to monitor these notifications to stay informed about incoming payments.

Record Transactions:

Maintain accurate records of eCheck transactions for your financial records. You can use accounting software or spreadsheets to keep track of payments, invoice numbers, and dates.


Regularly reconcile your bank statements with your recorded eCheck transactions to ensure accuracy and identify any discrepancies.

Use eCheck Payment Services:

Some businesses and individuals use third-party eCheck Payment Processing Services or platforms that provide additional features, such as electronic invoicing, transaction history, and reporting tools. These services can simplify the process of receiving and managing eCheck payments.

Parting Note:

eChecks stands as a reliable and adaptable payment method that continues to serve the needs of businesses and individuals. They offer reliable solutions to all businesses who are seeking the convenience of digital payments while preserving the trust and familiarity of traditional checks. Simplify your business’s payment processing with eChecks and make your financial transactions smoother and more efficient.

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