As a small business owner, it’s likely to look for ways to speed up your payment processing and get more cash flowing a lot sooner into your company. While choosing your company’s best payment options, you might have come across ACH payment processing companies, and some terms like electronic cash and eCheck. But, without understanding the working mechanism of each payment method, it is quite difficult to predict whether eCheck is the future of ACH and electronic cash. Thus, before going deeper into differentiating these three, we would like you to know more about these payment methods individually.
Even if you haven’t used ACH payment processing for small business as yet, the chance is higher that you have done so in your personal life. ACH stands for Automatic Clearing House, a term to conclude a vast electronic network for financial transactions. While paying your mortgage online, if you have supplied your bank account details and routing information, ACH is in action.
To provide a simple and to-the-point definition of eCash or electronic cash, it is a digital money product to make payments online while purchasing products and services. It is the simplest way to transact without resorting to paper coin or currency. An eCash user downloads the electronic money from their bank accounts and uses them to pay an internet merchant. Primarily, the eCash gets stored on the hard drive of the user. The amount of the eCash is taken from the payer’s wallet and is added to the merchant’s account during the time of making a purchase.
An eCheck is an alternative to ACH payment processing companies and electronic cash. The payment of an eCheck is made via the internet or another data network. It performs the same function as the other two payment options mentioned above and even as a conventional paper check does. It debits the amount from the purchaser’s account and credits it to the account of the merchant. There are four different stages in an eCheck payment, including the request authorization, filling up the payer’s payment details, rechecking the payment details and submitting, and finally confirming the payment and depositing the fund.
If we can think from the payer’s point of view, eCheck is a far better option than physical checks. Payments through eChecks are much more convenient, error-free, and faster than other traditional payment methods. However, the convenience of eChecks also applies to the recipients along with the payer as it is a much more reliable means of payment to receive from an unknown buyer.
In addition to that, there are few more benefits of using an eCheck, such as:
It is not easy to oversee the personal benefits of other payment methods, including ACH payment processing companies and electronic cash. Also, eCheck is not yet the fastest method of online payments. But if we need to talk about the future of online transactions, eCheck can be considered as a better option than ACH and electronic cash.
People who are willing to make daily payments and want to accept payments online, a digital version of check payments sounds more professional and useful. The processing speed of an eCheck has already been reduced, and it is likely to reduce even further. The implementation of machine-readable accounts, routing, and check numbers has made this payment method more efficient. The increased sophistication in public-key cryptography and digital signatures’ commercial usage have made eChecks much safer and reliable.
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