Do you know how to cash your customers’ checks electronically? Do you have to pay with eCheck? Need help with eCheck payment? Here, at PayRetailers, we explain more about this payment method.
What is an eCheck?
An electronic check or eCheck is a way to pay online using bank account information to transfer money. With this digital version you transfer the amount through an ACH network and deposit it into a beneficiary’s checking account.
Payments are handled by the Automated Clearing House (ACH) network. What’s more, with a merchant ACH account, a business can withdraw money for goods or services directly from its customer’s bank account.
The payment must be authorized by the buyer through a signed contract, acceptance of the “terms and conditions” on a website, or through a recorded voice conversation. This is to maintain security for the amounts moved between the depositor and the company.
How do eChecks work?
Instead of issuing a physical paper check, the process is carried out electronically. When processing eChecks, technology comes into play to speed up time and help save paper.
Here are some steps to process an eCheck:
- Ask for authorization: the company requires the customer’s authorization before executing the transaction. This can be arranged through a telephone conversation, order form, or online payment form.
- Payment setup: payment information is entered into the online payment processing software. If it is a recurring payment, this detail is added to the recurring schedule data.
- Finish and submit: click on “save” or “submit” to start the ACH transaction process.
- Deposit funds: payment can be withdrawn automatically. The online software sends a payment receipt to the client and the money itself is deposited into the organization’s bank account.
To cancel the eCheck, you need to consider the payment process and the stage of the transaction.
If the payment has already been made to the account, it cannot be cancelled, and a refund must be set up. If the payment is pending, you will need to contact your payment processor for information on cancellation steps.
How do I send an eCheck payment?
To send an electronic payment you must verify that the business or person you are sending money to has an ACH merchant account. This type of account gives you the ability to use an ACH network to accept payments from an electronic funds transfer.
It is worth mentioning that the funds are deposited in the bank account three to five business days after the transaction is made. This occurs when the payer has the amounts available in a checking account.
If the payer has eCheck, the process may vary. Also, funds are normally verified within 24 to 48 hours after the transaction has been initiated.
If you’re wondering whether eChecks are processed on weekends, you should know that this depends on the financial institution. Most are restricted to processing on business days (Monday through Friday). As we said before, payment is processed in three to five days. If you accept a payment on Thursday, the amount is likely to appear on Tuesday.
How much does it cost to process an eCheck?
The cost of processing an eCheck may vary according to your payment provider. Some may ask for a flat fee for each transaction, while others go so far as to charge a percentage of the eCheck money. However, the price for the average fee ranges from $0.30 to $0.50 per transaction.
Is an eCheck the same as an ACH?
An eCheck and an ACH (Automated Clearing House) are concepts that are sometimes used to refer to the same thing. However, they are slightly different.
An eCheck refers to the action of creating, sending, and processing a specific eCheck, whereas ACH is a term that refers to the electronic payment system as a whole. This includes different types of electronic transactions such as wire transfers, eChecks, and direct debits.
In other words, to better understand this difference, we could say that an eCheck is a type of electronic funds transfer that uses the Automated Clearing House (ACH) network for eCheck payment processing.
Benefits of e-check payment
Here are some of the benefits of eCheck payment:
- Easier: no need to issue or send a physical check.
- Shorter processing time: eChecks are processed faster than traditional checks.
- Lower cost: eChecks can be more economical than physical ones because they do not require the printing, handling, or transporting of paper.
- Security: increased security and effectiveness, since you can know with certainty that the check is traceable.
- Reduced dishonor: minimizes the reasons for which a check may be dishonored.
In summary, eCheck payment is a modern way to pay, minimizing payment times and speeding up fund transfers. Don’t forget that at PayRetailers we offer an integral platform to unify your users’ favorite payment methods.