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Benefits of eCheck processing via the ACH network

Author: Paul Staple
by Paul Staple
Posted: Apr 12, 2020
paper check

We have probably all done it hundreds of times - pulled out our checkbook to pay a bill. It is easy to assume that paper checks will be manually sorted by the business, deposited at the bank, and processed. But with the Digital Age upon us and the draconian measures imposed by the government on "high risk" industries, paper check processing in this manner is becoming less and less likely, and less convenient.

Electronic check processing (eCheck Processing) is changing the name of the game. eCheck Processing gives high risk businesses the ability to collect the information on a paper check and electronically collect money from a bank account, using the same secure Automated Clearing House (ACH) Network that is used for Direct Deposits and Direct Payments.

So what are the benefits of converting paper checks into eChecks?
  1. Converting eChecks will decrease businesses' operating costs. In addition to the money saved, a business will not have to direct as much time or resources to process those paper check payments, including making multiple trips to the bank.
  2. An additional and often overlooked benefit of eCheck processing is security. An electronic check transaction passes through far less human hands than a paper check - making a consumer less vulnerable to identity theft, and making a high risk eCheck processing a MORE secure payment processing method.
  3. eChecks can also help improve cash flow and on-time payments. No longer does a business have to wait for the check to arrive in the mail — eChecks can be accepted over the phone or through electronic invoicing — whichever is more convenient for the customer.
  4. Consumers also benefit from the convenient payment options that can be offered with eCheck processing. A high risk merchant account with eChecks lets consumers purchase with funds from a checking or savings account rather than paying by card. A consumer can take the routing, and account number printed on the bottom of their checks and make payments over the phone, online, or on an automatic schedule. This way, their payments can be debited from their checking account, without adding to the balance on their credit cards - an essential factor in today's economy.
How does it work?
  1. Notification - If the business is collecting physical paper checks, the customer is informed the paper check will be converted to an electronic form. This is usually done on invoices. In addition, the customer will receive a notification of the transaction details (often, this is done via email). A quality payment solution will do this automatically for the business.
  2. Collection and Conversion - The paper check is converted into a one-time ACH-based electronic payment. Check scanners enable businesses to do this quickly and efficiently. The business then keeps the check or copy of it, as a "receipt" of the payment.
  3. Processing - The payment information is then electronically submitted to a processor and then to the financial institution via the secure ACH network. Your customer's bank account shows a pending debit within about 24 hours, and your account is credited with the funds in about 72 hours.

If your high risk business is looking for a faster, inexpensive way to collect payments that also offer customers more convenience, eCheck payment processing is a simple, secure solution.

About the Author

Liberty Enterprises offers a wide array of offshore and US domestic credit card and Ach/E-check merchant solutions.For more visit www.confidentialbanking.com

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Author: Paul Staple

Paul Staple

Member since: Jul 18, 2016
Published articles: 51

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