What is an Electronic Check?
Put simply, an electronic check (eCheck for short) is the online version of the physical checks we’ve used for years. However, because of its electronic format, it allows for easier, faster and often more secure transactions than the dead tree version. Electronic checks can be used for any transactions for which purchasers could use a paper check, and still remain protected by the same laws and regulations. The benefits of eChecks arrive to consumers in the form of convenience and security; business owners benefit from getting paid more quickly and efficiently.
Why is Electronic Check Processing Faster?
One of the more obvious reasons an eCheck is faster is that it is instantly entered into the payment process after a transaction is initiated (be it an online purchase or online payment from a bank account). Once the payment form is completed online and submitted, the automated process can begin. A paper check, on the other hand, needs to first run through an electronic scanner that captures the customer’s banking information and amount to be debited. If this scanner isn’t located within your business, you may have to head to your nearest bank and deposit it there (wasting valuable time).
How is an Electronic Check More Secure?
Electronic checks provide a variety of online security features not available with paper checks. Some eCheck security features include authentication by digital signature (online identity authorization), public key inscription (to verify funds are not tampered in the process), and duplicate check detection (to prevent fraud).
What are Other Benefits of Electronic Check Processing?
- Go Green. Electronic checks reduce the use of paper checks and promote a paperless transaction process.
- ACH Network: Electronic check processing relies on the ACH Network, the same reliable system that manages direct deposits.
- Fewer Errors: A more automated process minimizes the chances for error.
- Lower Processing Costs: The processing cost for eChecks is typically lower than both physical checks and credit cards.
- Recurring Billing: Have your customers pay you automatically on the schedule you specify.