An eCheck, or electronic check, is something you may be familiar with if you are into eCommerce. It is one of the most recent payment methods that can assist you in giving your users a seamless shopping experience.
You might not be very knowledgeable about it because it is a novel idea. So I’ll explain what an eCheck is, how it operates, and some of its common advantages in this post.
Defining an eCheck and Outlining the Basics
Let’s first define what an eCheck is in order to begin. Electronic checks, also known as eChecks, are a more contemporary version of conventional paper checks. The idea is based on the Automated Clearing House (ACH) network, which debits the payer’s account directly for the amount to be paid.
Think of it as an electronic equivalent to a paper check where funds are electronically transferred in a secure setting from a payer’s account to a seller’s account. As they are quicker, safer, and more practical to use, eChecks have become very popular recently. These days, they are also referred to as ACH payments, ACH transfers, or direct debits.
How an eCheck Operates
Let’s examine the operation of an eCheck now that you are aware of what it is. eChecks are processed in much the same way as paper checks, but more quickly. That is, everything is handled electronically rather than by filling out a check and mailing it to someone. Typically, the following steps are involved in processing an eCheck:
The first step in processing an eCheck that is initiated by the business is to request authorization. The company should ask the customer for authorization checks before proceeding with the transaction. This can be done in a variety of ways, including with an online check, signed orders, or even a phone call.
- Payment Setup: Following the completion of the authorization procedure, the customer’s necessary information is sent to the payment processing system. One can also select options for one-time or recurring payments here.
- The End And Submission: That’s it! The transaction is then submitted to an ACH system after passing through a number of security and authorization steps. It is accepted and completed if all the inputs line up.
- Money Deposited: After finishing the last step, the specified sum is taken out of the customer’s bank account. Funds are then transferred to the seller’s account and appear within 3-5 business days. The customer receives a copy of the payment receipt, which is also kept on file by the bank and the seller.
Principal Advantages of eChecks
There are many reasons why eChecks are growing in popularity in today’s world. You can already see the advantages of an eCheck from our description of what it is. However, these are some of the main justifications for why you might also think about switching to eChecks or including them in your list of payment options.
- Cheaper: eChecks are significantly more cost-effective than alternative methods (such as credit cards). Due to the fact that eChecks use the direct deposit method, businesses are not responsible for additional processing fees.
- Diversity: You can use electronic checks in a variety of ways because they adhere to a straightforward and secure process. You can use them to pay for things like rent, eCommerce services, insurance premiums, and more.
- Faster: Once more, eChecks can be processed much more quickly than paper checks. The manual authorization and processing of paper checks can take a long time. However, eChecks are automatically processed with very little to no delay.
- Security: It goes without saying that paper checks are easily compromised or altered. This can raise numerous security issues and even encourage fraud. No fake checks can be authorized because eChecks are based on a secure ACH network. Both businesses and customers benefit from a safer online payment process as a result.
- Automation: The main benefit of using eChecks over paper checks is the ability to fully automate the payment process. They are therefore a great choice for paying your rent, insurance premiums, subscription fees, and other recurring bills.
Questions and Answers
What information must customers provide in order to set up eChecks?
By having their account authorized by their banking or payment system, any user can set up their eCheck. They only need to enter their checking account number and bank routing number to accomplish this. They only need to enter the amount to send and authorize the transaction once the eCheck system is operational.
How is an eCheck system set up for businesses?
Businesses can set up an electronic check system just like customers can. They must sign up on the ACH system as an authorized merchant in order to do this. This requires information on the company name, address, transaction processing volumes, bank account information, and federal tax ID numbers. Businesses can begin accepting payments from their customers after the authentication process is finished.
What can be purchased with eCheck payments?
E-check payments have a wide range of uses and can be applied to various situations and industries. They can be applied to carry out peer-to-peer exchanges or legal payments. They are also perfect for securing payments of rent, insurance premiums, subscription fees, loan repayments, and other expenses.
Are ACH and EFT the same thing?
All electronic transfers can be referred to by the umbrella term EFT, which stands for Electronic Funds Transfer. This covers ACH payments, wire transfers, and direct deposits. ACH payments, on the other hand, rely on a special Automated Clearing House system, which is a controlled electronic payment processing system. As a result, you could say that eCheck is a particular type of EFT that is based on the ACH network.
How much time does it take for an eCheck to clear?
This would depend on how many working days are involved in the authentication process as a whole. Typically, a standard eCheck is cleared 24 to 48 hours after the transaction is started. However, deposits appear after the transaction is initiated and approved in 3-5 working days.
An eCheck may be canceled, but how?
The procedure will largely depend on the payment system you are using, but you can cancel an eCheck. You can cancel a pending payment by getting in touch with the payment gateway or your bank. However, a payment that has been cleared and deposited to another account cannot be reversed.
What occurs if an electronic check bounces?
The likelihood of an eCheck bouncing is reduced by the strict security protocols. If the payer’s account is insufficiently funded, the payment will bounce. A penalty may be assessed against the payer if a check bounces. You must make sure your bank account has enough money before authorizing the check to prevent that.
Find the Best Dropshipping Solution with dropship-empire
While the idea of electronic checks can assist you in giving your customers a smoother experience, you must have the appropriate products in your store to offer. I suggest using dropship-empire, the official AliExpress dropshipping tool, for this.
- You can choose the ideal goods to sell in your store by using the access that dropship-empire will give you to thousands of sellers around the world.
- As the official dropshipping tool for AliExpress, Shopify, Wix, and WooCommerce can all be easily integrated with it.
- Additionally, you can use its Supplier finder feature to quickly identify the most reliable and successful suppliers for any good.
- dropship-empire’ automatic order status tracking will aid in keeping your customers up to date on their orders.
- Numerous other sophisticated features, such as variant mapping, stock management, bulk ordering, bundle products, PayPal order tracking, and others, are available in dropship-empire.
You’re all set! This in-depth explanation should have given you a better understanding of eChecks and their potential benefits. In addition to outlining fundamentals like what an eCheck is, I have also listed its advantages and attempted to address any pertinent queries regarding the idea.
If you want to support your dropshipping store, feel free to learn more about eChecks and to try a program like dropship-empire. It is the official dropshipping tool from AliExpress, and it has a ton of features and supports all popular platforms.