15 questions answered about eCheck payments

1What is an eCheck?

An eCheck — or electronic check — is an electronic money transfer sent from your bank account to another person’s bank account. It’s similar to a traditional paper check, but it’s sent digitally. eChecks are also known as online checks, direct debits, or internet checks.

2How do eChecks work?

eChecks work similarly to paper checks. Instead of writing your check by hand and mailing it, you can fill out your information online and send the check electronically. The eCheck is then processed by the Automated Clearing House (ACH) network, which connects all U.S. banks and facilitates the transfer of funds between accounts.

Here’s a closer look at how eCheck payment processing works:

• The customer fills out their eCheck through an online payment portal and authorizes the payment. As with a paper check, they have to provide their bank account number and routing number.
• The business’ payment processor receives the eCheck and sends a payment request to the ACH network.
• The ACH network confirms that the funds are available in the customer’s account.
• The money is withdrawn and transferred from the customer’s bank account to the business’ bank account.

3What’s the difference between ACH and eChecks?

It’s important to understand the difference between eChecks vs. ACH payments. eChecks are a form of ACH payment — because they’re processed by the ACH network — but not all ACH payments are eChecks. An ACH payment is any payment that’s made from one bank account to another and facilitated by the ACH network.

4How do eChecks compare to wire transfers and electronic funds transfers?

Now let’s look at the difference between eChecks vs. wire transfers and eChecks vs. electronic funds transfers (EFTs).

An EFT refers to any digital transfer of funds between accounts. An eCheck is one type of EFT, for example. Other types of EFTs include wire transfers, direct deposits, and digital wallet payments.

A wire transfer is specific method of moving money electronically from one bank to another. The big difference is that wire transfers are made directly between two banks. That means they can move funds in minutes, but they can also be more costly and less secure. eChecks, on the other hand, are processed and verified by an ACH network first, so they can take a bit longer to clear.

5Are electronic check payments secure?

eChecks are a secure form of payment and can be preferred over payment methods like paper checks.

eChecks come with certain protections that can help businesses manage risk. Most notably, they’re verified by the ACH network, which authenticates customer information and encrypts data for enhanced eCheck security. eChecks also require timestamped digital signatures to help prevent fraud.

Read more articles about payment security.

6How to accept eCheck payments?

To accept payments via eCheck, businesses need to work with a payment processor. The payment processor will help facilitate the eCheck payment and transaction. They can also help you set up a payment gateway to safely and seamlessly accept eChecks at different points of sale, such as in your store or through your e-commerce website.

7How to send an eCheck?

Sending eChecks is easy. With an eCheck service set up through your payment processor, customers can choose to send you eChecks at your point of sale. They just have to provide their bank information, including their routing number and account number. The payment processor and ACH network will take care of the rest.

8How long do eChecks take to process?

It typically takes 3-7 business days to process eChecks and deposit the money into your account. That’s because the ACH network processes payments in batches, not one by one. Once they start processing the eCheck, they have to verify the customer’s bank information and perform security checks. As noted, this can take a few days.

Like paper checks, eChecks aren’t processed on weekends and holidays. So if a customer sends an eCheck on Friday, you may not receive the funds until the middle or end of the following week.

9How to cancel an eCheck?

Your payment processor can provide their guidelines for canceling eChecks. Typically, however, you can cancel an eCheck as long as it’s still processing, and the money has yet to be deposited. If the payment has already gone through, you can set up a refund.

10Should you include eChecks as part of your business payment options?

When customers are ready to pay, you want to be ready with their preferred payment methods. Even if you already accept credit cards, debit cards, and digital wallets, eChecks can help you expand your payment options and keep driving revenue.

You may consider offering eChecks, especially if your customers prefer this method and you're looking for a safe, fast, and more reliable alternative to traditional checks. eChecks are also a good solution for setting up recurring payments. Customers can simply authorize recurring payments when submitting their eCheck information, and the ACH will automatically pull the funds from their account each month.

11What information is needed to send or receive an eCheck?

To send or receive an eCheck payment, you generally require the sender's bank account number and routing number, the recipient's name and bank account information, and the transaction amount.

12How much does it cost to process an eCheck?

The cost for eCheck processing varies based on the service provider, transaction volume, and additional features. On average, eCheck processing fees can range from $0.30 to $1.50 per transaction, with some providers offering low rates for high-volume businesses. Additional fees may apply for returned or insufficient funds transactions.

13Are eChecks suitable for international transactions?

eChecks are primarily designed for domestic transactions within the U.S. and are not commonly used for international payments. International transactions often involve different banking systems, currencies, and regulations, making alternative methods like wire transfers, international ACH transfers, or digital payment platforms more suitable for cross-border payments.

14Do eChecks process on the weekends?

Like paper checks, eChecks aren’t processed on weekends and holidays. So if a customer sends an eCheck on Friday, you may not receive the funds until the middle or end of the following week.

15Can you get scammed with an eCheck?

Yes, eCheck scams are possible. Scammers may use fake or stolen bank account information to initiate eCheck transactions, leading to unauthorized withdrawals from victims' accounts. To avoid eCheck scams, verify the legitimacy of the payer or payee, be cautious of unsolicited eCheck payments, and use trusted payment platforms with security measures.