Lets Bust The Common Echeck Processing Misconceptions You Have

We all know how overwhelming it was when we had to physically write checks, search for stamps, and go to the post office just to pay recurring bills. Today, fortunately enough, using debit or credit cards, and eChecks, these recurring payments can be made easily. Here we bring all the electronic check information you were looking for.

However, today’s let’s talk about some of the most common misconceptions you might have about echeck online processing:

About Protection Features 

Several precautions are used by financial institutions to reduce the risks of processing controls, such as specially treated paper, watermarks, and other protective measures. This helps, but at least they are not foolproof in saving your money. With echeck online payment methods, tokenization is included in the process.

Tokenization brings more encryption to the scene by substituting a randomized character string for sensitive data. This reduces the risk of fraud and identity theft significantly.

About Costs

Although it is relatively low-tech to process paper checks, that does not always translate into lower costs. There is no need for manual monitoring and sorting for safe electronic control processing systems, leading to substantial savings.

For example, if 500 paper checks are collected per month by your company, that means thousands of dollars go to about two or three workers just to handle invoices, stuff envelopes, and reconcile software payments. pay with electronic check online, the costs never add up.

More Market Preference

Here are some of the facts about the market share of online echeck solutions. Amazingly, the use of paper checks has decreased dramatically since 2001.

  • The amount of check payments in the country has decreased by almost exactly 2 billion per year for each of the previous 10 years. 
  • The use of electronic payments has grown significantly which is largely due to how quick and easy the collection of eChecks is.
  • It is possible to process purchases at all hours and in the comfort of a customer’s home. 
  • Electronic delivery of checks offers a secure, reliable, and flexible alternative to conventional payment methods for retailers and consumers. 
  • If a physical checkbook goes missing or bounces, it brings a lot of concern for business owners. This is not the case with echecks.

Difference Between eChecks and Credit Card Transactions

Processing eCheck functions much swifter than processing credit cards. The main distinction is that eCheck uses ACH to move funds instead of the card networks, so payment costs are smaller. For eCheck approval, there are no credit card interchange fees and fees may be as low as 10 cents per purchase.

For firms that work with substantial or periodic fees, adopting echeck processing can make a major difference.

eChecks vs Wire Transfer and EFT

EFT or electronic funds transfer is an umbrella concept that encompasses the different process of electronic payment system. The list includes the following:

  • eCheck
  • ACH transfer
  • wire transfer
  • direct deposit
  • PayPal payments
  • SEPA payments
  • local bank transactions
  • eWallets

Transactions like eChecks and ACH are essentially forms of EFT, but eChecks and ACH are not all EFT transactions. Here are some factors to understand:

  • Wire transfers shift cash from one bank account to the next. This occurs individually, one transaction at a time, unlike ACH transfers that take place in batches.
  • Wire transactions cost more than ACH. 
  • Another distinct distinction is that wire transfers cannot be reversed once started, unlike ACH, and are thus deemed less reliable than ACH.

How Does The eCheck Processing Look Like? 

In order to allow echeck payment processing, there are some criteria that a business must meet.

  • First, the company must collect the customer’s data, including their checking account numbers and bank routing. 
  • You can access this information online, by phone, or in-person with a paper form. Most organizations today have websites that can offer this consumer data.
  • The merchant’s bank will connect directly with a customer’s bank using this information. 
  • The direct debit happens via ACH once funds are checked. 

A lot of money annually is transferred by ACH. Remember that in Q1 2019 alone, the ACH Network Volume rose by 5.8% as compared to Q1 2018. This is the right time for you to take one step ahead and adopt the booming technology. If you are looking for more detailed electronic check information, kindly reach out to us.

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