What Is An eCheck?

What is an eCheck

eCheck is also known as electronic check, online check, internet check, and direct debit. You can also refer to it as an electronic version of a paper check. This electronic check payment is usually funded by the buyer’s bank account, and it uses the Automated Clearing House (ACH) to direct debit from a customer’s checking account into a merchant’s business bank account, through a payment processor.

An eCheck usually takes six business working days for appearing in the recipient’s account after clearance. You must have enough money in your bank account to cover the eCheck. 

In case of cancellation of eCheck, you should contact your bank or contact the seller directly if it’s already canceled. 

This article covers:

How is an eCheck processed?

It works similar to a paper check that is used as a money transfer statement from one bank account to another. It is a digital payment procedure, that is why it is more efficient than a paper check. The three basic steps to process an eCheck are:

Authorization request:

The payment authorization must be done by the customer through a phone call, signed order form, or online.

Payment information:

After the authorization of payment, the payment details should be updated on a payment processing system, in both cases, a one-off payment or recurring plan.

Payment confirmation:

Once the payment details have been updated in the system, the business can use the ACH system to start its financial transactions.  The funds will then be deposited into the business account and withdrawn from the customer’s checking account. It takes almost six days to complete the processing of eCheck.

Why Use E-Checks?

eCheck is simple and easier to use than a traditional paper check. They help businesses to achieve their financial goals by confirming the transactions in no time. In other cases, you have to mail a check for payment, which usually takes a lot of time for confirmation. It also has the chance of getting lost, so it is much better to use eChecks for payment confirmation. It not only saves you time but also keeps your checks securer than those of physical checks. eChecks also prevent fraudulent transactions by keeping your checks secure. 

What Types of Payments Can Be Made With E-Checks?

eChecks can be used for different types of payments such as:

  • Mortgage payments
  • Health club memberships
  • Electronic funds transfer
  • Auto loan payments
  • Echeck Rent payment
  • Credit card payments

The IRS also accepts for eChecks that are best for recurring payments. 

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