Detailed Guide on eCheck Payment Services and Processing of eChecks!

We are all aware of different online payment systems that are currently rolling in the digital markets. These payment processing systems facilitate financial transactions for different kinds of businesses like e-commerce and also cater to the payment needs of players who sell different products/services online. However, as a business person, one should not be complacent about learning because newer and newer technologies are coming up every day. One such financial technology is eChecks. They have been around for quite some time now and have been successfully offering businesses a novel way of receiving online payments. This post covers eChecks in detail and talks about things like how to avail of eCheck Payment Services, their advantages and benefits, and other important information about eCheck processing depth.

Let’s begin with the basic understanding of an eCheck payment system. eChecks are the digital version of conventional paper checks. The only difference is that they are processed completely online and the use of paper is not involved. eChecks facilitates the transfer of funds directly from the payer’s checking account to the bank account of the merchant or payee over an ACH (Automated Clearing House) network. An ACH merchant account is needed for this purpose which is provided by the company that provides eCheck processing services to your business. Business owners can also directly withdraw funds from the bank accounts of customers after proper authorization which can either be a signed contract, a digitally verified ‘terms and conditions’ document, or through a recorded phone call conversation.

From the above information, it is evident that eCheck Payment Services are fairly simple and uncomplicated. The merchants, as well as the customers, face the least amount of hassle and complete financial exchanges in a very fast, reliable, and easy manner. Several companies offer eCheck services and they offer free/zero-fee set-up of an eCheck merchant account, although a monthly rental fee and service charge fee per transaction is charged for these services. An eCheck is generally processed within 24-48 hours and the payment is transferred to the merchant‘s bank account within 3-5 working days.

How much do eCheck services cost to the merchant?

Usually, eCheck services are free to set up, you just need an eCheck merchant account and you are good to go. Some companies levy a large monthly rental but charge a lesser per transaction fee comparatively while some have a low monthly rental but a higher per transaction charge. Typically the fee for each transaction ranges from $0.30 to $1.50 which is way less than credit/debit card processing fees.

How do eChecks work?

eChecks are authorized and processed by the ACH network. Automated Clearing House technology is used to facilitate the transfer of funds via eChecks. Here is the complete flow of eCheck processing services.

Steps of processing an electronic check:

1. Requesting authorization: The payee requests the payee to authorize the transaction, this can be done via a signed document, over a recorded phone call, or by email.

2. Setting up Payment: After authorization, the payee sends the payer a request to start the payment process. This is usually an eCheck form or a link redirecting the user to a payment form asking to fill in details like account no, amount routing number, etc.

3. Finalization and Submission to ACH: After the data is filled in the form, the transaction is finalized and submitted to the ACH network for verification purposes.

4. Payment confirmation and Fund Deposition: Once the eCheck is verified, payment is confirmed and funds are moved from the payer’s to the payee’s account. This completes the eCheck payment process.

The above process begins with the merchant requesting the payer for a payment which can be done in two ways as listed below:

1. The Payer sends an online payment form to the customer via an email where the user fills in their checking account number, routing number, and the amount of payment (if not already input by the payer). Post filling the form the user clicks the submit button which sends all this information back to the payer.

2. The second way is by making a call on a recorded phone line in which the merchant asks for the checking account number and the routing number and enters them into an online payment form. Upon submission, the amount is deducted from the customer’s bank account and transferred to the merchant.

As a merchant/business owner, certain documentation is required to avail eCheck services for your business. These include:

1. A federal Tax identification number

2. Number of years in business

3. An estimate of processing volumes under eCheck

eChecks are gaining popularity among businesses as they are very efficient and useful. They are also very beneficial for recurring payments like subscriptions and regular monthly payouts. Apart from these benefits they are economical for the merchants and offer a fast, secure, and reliable method of payment to the consumers. They are being used for facilitating B2B, B2C, and B2B2C financial transactions because of their viability, simplicity, and ease of process.

We hope that you find the above information on electronic checks useful. For more information on different kinds of payment processing services, keep watching this space. Don’t wait, avail of eCheck Payment Services today and get a zero-fee set-up today and start transacting.