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What are E-Checks

An e-Check is the electronic version of the standard paper check. These are sometimes called electronic checks, direct debit, or ACH transfer. E-checks are used to make payments online using only the info that would be contained on a “paper” check.

To pay  via  E-Checks or to collect money from E-Checks, an online payment processor must be used. There are different payment processors online that will accept E-check payments and they all work the same way.

As of 2012, Echecks are now a standard way to make payments online, along with Credit Cards and 3rd Party Payment Processing Companies like PayPal, MonyBookers, and the like.

Advantages of E-Checks

Some of the benefits of E-Checks

  • Lower Fees (typically, E-checks require less fees than credit card or paypal payments)
  • Cost Efficient
  • Received Bounced Check Notification within 48 hours
  • Can Store account information for repeat purchases
  • Flat fees cheap (around .50 cents US, depending on company)
  • Leaves a Digital Trace
  • No need to deal with the hassle of paper checks
  • eChecks can be used for recurring billing services

How Electronic Check Processes Work

It’s a pretty simple process, despite all the fancy “digital”  stuff going on behind the scenes.

1. Authorize

Customers are notified that their paper checks will be processed. The customer must give permission, either in writing, via phone, or through an electronic form.

2. Enter Transaction Info

The following information is collected:

  • Bank Routing Number
  • Bank Account Number (usually a checking account)
  • Name Associated with Bank Account
3. Processing

The information is processed by the ACH network (or other check verification network) and the customer’s account is debited for the amount while the merchant’s account is credited.

4. Confirmation

Once the payment has been electronically debited, the payment will be visible under the customer’s bank account statement. The billing company name, the check number, and the amount will be visible.

Some E-Check Processing Companies

  • eCheck.Net
  • Paypal (you can pay via an echeck option, if you’ve linked your bank account)
  • PaySimple.com
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