What is eCheck Payment Processing? Electronic Check Payment
Are you looking for the answer to what is eCheck & how it works? Well, As a merchant or small business owner, you must stay one step ahead of your competitors. You can do that by providing secure, efficient, and reliable payment methods to your customers. Where other payment methods are important in businesses the echeck has acquired its own place. Especially when you have experienced a number of challenges with traditional checks delayed payments, bounced checks, or costly processing fees, eCheck payment processing is an excellent way to make your transactions more smoothly.
E-checks are faster than paper checks & less expensive to process as compared to credit cards (unless you find a good Payment Processor) & surprisingly e-checks are becoming more popular options for both consumers & business owners day by day. Many people in the United States like to pay using the e-check method instead of other traditional payment methods because of its lower prices.
What is eCheck?
Echeck stands for electronic check. It is a digital version of a traditional paper check. It allows funds to be transferred electronically from the consumer’s checking account directly into the payee’s checking account through the Automated Clearing House (ACH) network.
The process is faster, more secure, and automated. instead of paper checks to withdraw money from a customer’s bank account. (which obviously consumes time & more processing fees). It is an affordable payment solution, especially for those who just started their businesses & can’t afford any risk & high processing costs.
How Does eCheck Payment Processing Work?
Processing an e-check is easy. The basics for eCheck payment are similar to paper checks but faster than that because everything is shifted electronically. So you don’t need to fill & send it manually to the business instead you can use the online eCheck payment processing system and make your payments through ACH.
First thing first as a business owner you must have your merchant account with a trusted payment provider company. Ensure you get a reputable ACH transaction provider that will encrypt your customer data, The payment providers who follow PCI compliance are the trusted ones (Phozellpay is one of them).
Step: 1 Authorization
Request authorization from your customer this can be done in many ways like filling out an online payment form, signed order form, or recorded phone conversation. The customer provides their bank account details (routing and account numbers) and authorizes the payment.
After the authorization, you will enter all the required details and set up the payments in online payment processing software. In the case of recurring payments, the details of the recurring schedule are necessary (e.g. 1st or 15th of the month.). Now click on save & submit.
Step: 2 Verification
Now it will be submitted to your payment processor for submission to the ACH network. The payment processor verifies the information to ensure the account is valid and has enough funds. Please note that ACH payment can be rejected in case of your customer’s empty pockets. There should be enough funds to complete the transaction successfully.
Step: 3 Funds Transfer
Once verified, the funds are transferred electronically from the customer’s bank account to your business’s account through the ACH network.
While this might sound similar to credit or debit card payments, it’s worth noting that eChecks generally have lower fees and can be a more cost-effective option for businesses dealing with large transactions.
Is eCheck Payment Method Safe?
Every second business owner is concerned about whether eCheck payments are as safe as other methods. Yes, eCheck payments are safe, often even safer than traditional checks which can be stolen or lost easily. Especially the ACH network which is an in-built fraud detection mechanism.
What is the eCheck Payment Processing Time?
While eCheck payments are not instant like credit card transactions, they generally take between 3 to 5 business days to clear. Because it includes customer authorization, verification & transfer of funds through the ACH network. By planning around the processing time, businesses can still leverage the cost-saving benefits of eChecks without sacrificing too much in terms of cash flow.
Benefits & Drawbacks Of eChecks
Like any payment method, the eCheck payment method too has its pros and cons. First, we will discuss the benefits and then the Drawbacks of the eCheck payment method.
Benefits
Drawbacks
Information Required For Smoother eCheck Payment Processing
To withdraw customer funds online through an ACH payment, your business will need to sign up for an ACH merchant account. During the setup process, you’ll be required to provide:
To process an eCheck, you will need specific details from the customer:
How Phozellpay Can Help You Accept eCheck Payments?
With Phozellpay, accepting eChecks becomes even easier. Phozellpay offers:
