eCheck: What Is an eCheck & How Do You Use It? Steps to Know

Nicole Georgiev
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    When you’re running a direct to consumer (DTC) or B2B business, one of your top priorities is ensuring that customer payments are coming in on time, especially during seasonality in business. This helps you cover labor cost and other overhead expenses so that you can keep your business running smoothly.

    To make things as convenient as possible for your customers, it’s important to accept various forms of eCommerce payment, as it’s best to take payment types that are convenient for your customers such as contactless payments, blockchain based payment such as Bitcoin, and QR code payment. This includes being PCI compliant.

    Another type of payment method 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.


    What Is 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. It's a way to pay for something using your bank account, without having to write a physical check. You can use an eCheck to pay bills, shop on an online marketplace, or make other types of payments. 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 an ACH transaction also have smaller fees 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.

    Difference Between eCheck and Debit Card

    When making payments, there are a few options available to consumers. Two of the most popular methods are eChecks and debit cards. So, what's the difference between these two payment types? Here's how they compare to one another:

    An eCheck is an electronic version of a traditional paper check. When you make a payment using an eCheck, the funds are transferred from your bank account to the recipient's account electronically. This type of payment is often used for online purchases or bill payments.

    On the other hand, a debit card is a plastic card that can be used to make purchases or withdraw cash from an ATM. Debit cards are linked directly to your bank account, so when you use one to make a purchase, the funds are deducted from your account immediately.

    Additional differences between eChecks and debit cards include:

    • eChecks usually take a few days to clear, while debit card transactions are processed immediately.
    • You need a bank account to use an eCheck, but you can use a debit card even if you don't have a bank account.
    • There are some fees associated with using a debit card, but there are no fees for using an eCheck.

    So, which one is better? It depends on your needs. If you're making a purchase online or paying a bill, an eCheck is probably the best option. But a debit card is probably the better choice if you need to make a purchase quickly or withdraw cash from an ATM.

    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 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 and an eCommerce merchant account. 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.

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    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 at the bottom of this page.

    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.

    Are eCheck Transactions 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 eChecks and How to Use Them

    Secure payments should be a top priority for any business. In order to ensure whether a particular payment method is safe for both customers and merchants, you need to thoroughly understand them. So, if you'd like to learn more about electronic payment methods, read on!

    What Is eCheck vs ACH?

    An eCheck is a kind of ACH payment. eChecks use the ACH network to process payments from one bank to another. The main difference between an eCheck and a regular ACH payment is that an eCheck requires the sender's bank account information to process the payment. This information includes the sender's bank routing number and account number.

    Regular ACH payments require the recipient's bank routing number to process the payment. Anyone can send an ACH payment if they have the recipient's bank routing number. However, only someone with the sender's bank account information can send an eCheck.

    Is an eCheck Safer Than a Credit Card?

    eChecks are a safer and more secure way to pay than using a debit card. This is because eChecks offer authentication, encryption, duplication detection, and digital signatures. Thanks to these features, eChecks are much less likely to be compromised than paper checks or debit card transactions. 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 eCommerce accounting software

    How Do I Pay Someone With An eCheck?

    Before you can make a payment to somebody with an eCheck, you'll need to set up an account with a bank. Or, if you already have an existing bank account, you can sign up with a payment processor. Then, all you'll have to do is select how much you would like to pay and authorize the transaction. Paying somebody with eChecks is a process very similar to typical online payments. So, it's fast, easy, and secure.

    Are eChecks the Same As Direct Deposit?

    No, eChecks are not the same as direct deposit for a couple of minor reasons. Even though they might process similarly, the concepts of both payment types differ. An eCheck is usually a one-off payment for a one-time purchase. Meanwhile, direct deposits are a type of ACH transaction that continually uses the ACH network on a recurring basis.

    Another distinction between the two payment methods is that with eChecks, the payer's information is not stored in a database. However, that's a necessity for ACH payments like direct deposit. Even for something like a PayPal account, data must be on file to process recurring transactions.

    Learn About eChecks and Payment Processing With BlueCart

    Want to learn more about how you can pay invoices quickly, accurately, and at a lesser cost to you? If so, we've got just the right solutions for you. Schedule a demo today to learn more!

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