With so many business processes shifting to digital systems, it makes sense for traditional paper checks and banking methods to follow suit. Processing payments through the ACH Network is a popular way to pay invoices electronically and securely, but what about companies accustomed to the security of writing a paper check? Issuing checks through the mail can be risky and visiting banks multiple times a week is a waste of time. Electronic checks bridge the gap between historically-secure paper check processing and the modern-but-less-regulated electronic funds transfer (EFT) payments. So between the ease of ACH transfers and the security of eChecks, how do these two payment methods compare?
ACH Payment Overview
Using ACH to process payments or funds is simple and secure. ACH payments are processed through the Automated Clearing House network and involve transferring money from one bank account to another. Since money is transferred directly to and from bank accounts, fees associated with other payment methods such as credit card processing do not apply. Businesses can initiate automatic payments using ACH Debit transactions or one-time authorized payments using ACH Credit transactions. ACH transfers are considered to be one of the safest methods of money transfer in the United States.
Electronic Check Payment Overview
An electronic check, or eCheck, is a digital version of a paper check that initiates a money transfer from one bank account to another. An eCheck is a type of electronic funds transfer that lets businesses process money electronically rather than manually. Not only does this save you a trip to the bank, but it also allows you to transfer money much faster than through traditional checking means. Depositing money using an eCheck is significantly faster than manually processing a physical check. Electronic checks are often more secure than other payment methods as well; since bank institutions back eChecks, it is the only payment method that the United States Treasury supports and uses for online payments.
Using ACH Payment Processing vs. Electronic Checks
If you decide to use eChecks as your primary payment method, you may be pleased to know that electronic check payments process through the Automated Clearing House network. If your business still accepts paper checks, most banks allow you to transfer that information into an electronic check for faster processing. You can do this by either capturing the information with a photo or by manually entering the account information into your online bank system.
An ACH transfer simplifies this process by allowing you to send money directly from one account to another, and authorize others to send funds to your account. If your business incurs or collects regular fees, setting up an automatic payment using ACH Debit can save you the hassle of depositing multiple paper checks or tracking electronic checks. For businesses accustomed to using paper checks, it is time to consider accepting electronic checks to simplify your business and offer easier options to customers. Each of these payment types allows you to track funds in real-time, process payments faster, and reduce costs associated with paper checks.
ACH vs. eChecks at a Glance
Electronic checks allow your business to capture the same information as with paper checks but reduce the cost drastically by eliminating paper and trips to the bank. With electronic data capture, you can transfer information on a physical check into your digital banking system to quickly deposit payments.
If your business handles transactions primarily online, you may consider ACH transfers to reduce the amount of time it takes to receive and deposit funds. ACH transfers use bank account information to send funds from one pre-authorized account to another. Using this method, once you set up the initial authorization, you are ready to go. eChecks are a great solution to traditional check processing, and the entire process can be made even easier by setting up pre-approved ACH transfers.