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eCheck Processing Work: How Does it Work?

An eCheck is a payment method that allows you to collect money from customers without having a physical check in your hands. 

These transactions are processed through the Automated Clearing House (ACH) and typically credited within 24-48 hours. 

The speed, reliability, and security make it one of the preferred methods of payments among online users.

To submit an eCheck, you must first register with your bank as an ACH-ready merchant. This is necessary for your business to accept electronic payments.

Beyond knowing “what is an eCheck,” it’s crucial to understand how it works.

What Customer Data Do You Need to Process Customer Payments?

With echecks, customers enter their checking account number and bank routing number along with their name and billing address when making purchases. The money then gets transferred directly from the customer’s bank account into yours. 

How does an eCheck Work?

Electronic checks are processed by the Automated Clearing House (ACH) network. This platform powers the direct deposit of payroll payments and other transactions. Once you accept eCheck as a form of payment, funds are automatically removed from your customer’s bank account into your account. 

The eCheck process happens in 5 simple steps:

  • Step 1: The customer submits an eCheck to your store.
  • Step 2: Your store sends the transaction along to the ACH operator.
  • Step 3: The ACH operator confirms the funds are available, sends an authorization to your store, and notifies your customer via email that the transaction has been approved.
  • Step 4: Your store processes the transaction and ships the product or provides access to digital content.
  • Step 5: The ACH operator debits the customer’s account and deposits funds into your account.

Although eChecks are often used by smaller companies, larger businesses also benefit from them because they are convenient for both parties involved in the transaction. This form of payment has become increasingly popular over the years because it is an inexpensive way to pay online while providing many benefits for both parties involved in the transaction.

Final Words on eCheck Processing

Perhaps the main downside of using echecks is that they take at least three days to clear– so you won’t have access to the money during this period. However, you can remedy this situation by setting up automatic bill pay through your bank or credit union. This way, funds will be automatically deducted from your account each month and sent directly to the merchant of your choice.

Author Bio

Blair Thomas has been a music producer, bouncer, screenwriter and, for over a decade, has been the proud Co-Founder of eMerchantBroker, the highest-rated merchant account provider in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.