Online Check Payment
You may have heard of eChecks or even been asked to send an electronic check payment. Most online vendors accept electronic check payments, and many prefer them. So what exactly is an eCheck and how is it any different than other methods of online payment processing?
Defining the Electronic Check
Simply put, an electronic check is a digital version of a paper check that transfers money directly from one checking account into another. It is considered to be an Electronic Funds Transfer (EFT) that relies on established guidelines set by the traditional checking system. Using eChecks is safe and secure, and is the only electronic payment method that is backed by the United States Treasury.
How Does Electronic Check Payment Work?
These eChecks take bank account information from the payee and uses it to move money into another checking account. The process itself mimics paper check processing, but is far more efficient: money is taken from one bank account, transferred using the verified and secure ACH Network, and then placed into the receiving bank account.
You can opt to transfer funds digitally using an eCheck process by taking information from a physical check manually or by photo capture and sending it to your account digitally. Forte’s ACH and eCheck Guide further describes this at length, and by this method, businesses are paid faster, and your check clears immediately.
Offering electronic check payments is considered to be a “merchant service” provided by banks, allowing customers to quickly process, pay, and receive money from their checking accounts. Other merchant services include online credit or debit card processing, wire transfers, and other types of ACH payments.
Why Use or Accept eChecks?
You might wonder why your business should accept check payments online or pay using eChecks. The benefit of online check payments is that you can collect and store the same type of information you would get from paper check payments. Your business transactions will include information about the payee, the payee’s account and routing information, and historical data for your financial records.
With electronic check payment, you receive the same security as traditional banking methods with the added convenience of transferring funds online. You can choose to stop payment processing or settle disputes directly through your bank, which eliminates headaches of working with a separate online vendor to resolve issues.
If we are talking about benefits of specific business-to-business payments, it is important to look at speed as well as security. As with most digital transactions, eChecks process much faster than traditional checks, since account information can be verified online without the need for a paper check to be reviewed manually.
Electronic check payment allows you to securely and quickly process transactions to and from your business. This helps keep your financial records updated, your clients paid in a timely fashion, and your business running smoothly.