eCheck Payment: What Is An eCheck

Nicole Georgiev
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When you’re a DTC or B2B business owner, you need ways to keep your customer payments coming in and on time so that you can pay your staff and other overhead expenses. This means you may have to accept various forms of eCommerce payment, as it’s best to take payment types that are convenient for your customers. This includes being PCI compliant.

One of these payment methods is an eCheck, or electronic check. These are just like a paper check, except they’re submitted electronically and securely. 

Learn more about an eCheck and why you may want to consider using eChecks to accept payments online for your business.

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What’s an eCheck?

The simple explanation of an eCheck meaning is that it is a digital, electronic version of a paper check. It is also referred to as a direct debit, internet check, or online check. Like an ACH payment, these checks are run through the Automated Clearing House, where the payment is directly debited from the customer’s account and put into the business’s account using a payment processor.

What Is eCheck Payment?

While paper checks may still be used by some customers and businesses, the fact is that this form of payment will likely become obsolete some time in the near future. Many people already pay all of their bills online, eschewing the old methods of writing a paper check and sending it via snail mail. Paper checks also have a longer hold and processing time, creating a hold-up and stopping your money from getting to you sooner.

An eCheck payment streamlines this process, allowing for payment to be submitted online and cleared much faster than a paper check. Plus, eChecks don’t have to be physically deposited at a bank location, saving you time and the added headache of traveling to the bank on a frequent basis. They’re a great option, especially if you use one of the cloud-based, best banks for eCommerce business.

eCheck vs ACH

An eCheck, like an ACH transfer, is classified as an electronic funds transfer (EFT). EFT is a broad term that also applies to PayPal payments, wire transfers, and more. However, eChecks and ACH transfers are not the same as PayPal or wire transfers, as both of these are processed through the Automated Clearing House. Both eChecks and ACHs are processed in batches, which means they have less of a processing fee than wire transfers do. 

Similarly, eChecks and ACH payments also have less of a fee than credit card payments. For eChecks, processing fees may be very low, in some cases mere pennies. This makes it an attractive option for businesses that have to accept and process multiple payments each month. This may be the case if you use a subscription billing model.

How Does eCheck Work?

If you’re unsure about accepting eCheck payments or paying vendors this way, then you may want to learn more about how eChecks work and the process behind using them. It’s a fairly simple process that eliminates the issues with paper checks, plus adds a layer of security to your payments and financial information. Here’s a short guide to how eChecks work and how they can actually protect you better than paper checks can. 

How to Pay with eCheck

It’s easy to learn how to send an eCheck or to pay with an eCheck online. While the setup of individual payment portals may be slightly different, each should have the same basic aspects. The portal will request that you enter your bank routing number and account number. Make sure you verify this when you enter the account information, as incorrect entry can result in a delayed payment or incur a late charge. 

Once the information is entered, you’ll be ready to send an eCheck. Each time, you’ll log on and enter in how much you want to pay. Many portals will also allow you to set up recurring payments, which can be convenient for a busy business owner. This is especially helpful for paying dropshipping vendors. That way, your bills will be paid on time and you may even get a chance to take advantage of early-bird discounts if you pay in advance.

How to Cash an eCheck

If you receive an eCheck, you might wonder how to deposit an eCheck. The good news is that you don’t have to do anything on your end to deposit it once your system has been created. If you need help setting up your payment system or a digital storefront, you can request a demo here. Your customer’s bank will communicate with your bank to verify the funds on a new account. They need to verify funds before pulling out any money to pay you. Once this happens, the payment will be processed via ACH. To determine how long it does take for an eCheck to clear, you will need to speak with your bank as processing times may vary across financial institutions.

Is eCheck Safe?

If you’re wondering are eChecks safe, the answer is yes, so long as proper security measures and protocols are followed to keep financial information protected. Paper checks can be easily stolen from the mail, leaving your routing number and bank account easily visible to anyone who took the check or shared it with others. 

With an eCheck, your financial information is stored securely in a payment portal that no one else can access unless they have your password and username. Make sure to choose a password that is unique to the payment portal, so in the event one of your other accounts is hacked, the hackers won’t have access to this account.

Along with this, eCheck payments also use certain security protocols set forth by Regulation E to process them, which include encryption, authentication, cryptography, and more. These steps are taken to make sure that these payments cannot be fraudulent, which protects both you and your customer from any potential problems.

How Long Does an eCheck Take to Clear?

If you need to know exactly how long it will take for eCheck payments to clear and be deposited in your account, then you will likely need to speak with a representative from your bank. One bank may take a business day or two to process the payment, while some have the capability to process same-day payments. You’ll need to figure out if waiting a business day or two is feasible for your organization or if you need payment to process immediately.

An advantage of eCheck payments over credit cards, besides the higher processing fee, is that checking account information is not as likely to change as credit card information. This means less of a chance that a payment would not go through, thus increasing your business’ overall revenue.

eCheck Payment Processing

Deciding to accept eChecks is a big step, and you’ll need to know what tools to have to aid in eCheck processing. If you want to process them right at the point of sale, then you will need software that has that capability, along with a processor who can immediately push it through for you. To accept online eChecks, you’ll also need software that offers that capability too. 

Accepting eChecks is a measure that may help to increase overall revenue. If you have more questions about electronic checks and how to set up the system, speak with your bank or talk to a payment processing provider about your options.

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eCheck Me Out

Making and receiving payments using eChecks is an easy process that more businesses are adopting. It eliminates the need for paper checks and lets you safely and securely take customers’ payments.

Frequently Asked Questions About eCheck Payments

What is eCheck vs ACH?

An eCheck is a kind of ACH process. eCheck transfers use ACH networks in order to process payments from one bank to another.

Is an eCheck safer than a credit card?

eChecks are safe to use due to the level of security that debit and credit cards can't provide. This is because you must have a physical credit or debit card on your person when you pay.

What are the benefits of eChecks?

The benefits of eChecks include:

  • The ability to pay anytime from anywhere
  • Save time
  • Save money
  • Pay quickly while controlling your cash flow
  • Safe and secure
  • Compatible with up-to-date accounting software
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