An eCheck is a digital version of a paper check and is known as an electronic check. It is a next-generation payment technology that facilitates seamless transactions. With an eCheck, money is electronically withdrawn from the payer’s checking account and gets transferred to the ACH network, and deposited into the payee’s checking account.
It is a more secure, fast, and reliable alternative for merchants to accept payments as it completely vanishes the time of debit and credit.
How does eCheck work?
eCheck works like traditional paper checks only, but it completely vanishes the manual steps. Instead of a customer manually filling out a paper check and providing it to the merchant, eChecks allows them to pay instantly. It saves both time and paper.
Steps involved in eCheck process-
1. Request Authorization- The business requires authorization from the customer before proceeding with the transaction. It is facilitated through an online form.
2. Payment Set-up- Once the authorization is done, the business inputs the payment information into the online payment processing software. In the case of recurring payments, it includes the details of the recurring schedule.
3. Finalize and Submit- Once the information is inserted into the payment software, the business clicks “Save” or “Submit” to start the ACH transaction process.
4. Fund Deposited- The payment gets automatically withdrawn from the customer’s bank account, and online software sends a payment receipt to the customer. the payment gets deposited into the business’s bank account within 4-5 business days.
What are the advantages of eCheck?
1. It is faster- eCheck is a faster, easily accessible, and better alternative to paper checks. Traditional paper checks can take up to 4-5 days to complete processing, whereas eChecks gives you power/control to pay or accept payments within 4-5 seconds. Also, it completely vanishes the manual steps and completes the process online.
2. It saves your money- While using traditional paper checks, you have to pay an extra amount for the paper check, envelope, stamp, and time involved in preparing the check. Whereas, an eCheck cost is the same as a stamp cost but still works like a check. An eCheck saves you $1 per check.
3. It is more secure and Safe- eChecks end third-person involvement and reduce the risks of fraud.
4. Compatible with your current accounting software- eChecks are easily accessible with most of accounting software. Any transaction from your accounting software can be pushed into the eChecks system without any double entry.
5. Payment is possible from anywhere and anytime- An eCheck can be sent from any device instantly irrespective of the location.
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