In this modern age, online transactions have boomed. As a result, all the businesses who want to improve their payment process have accepted them. However, as many companies have changed how they buy and sell goods over the past years, demand for physical checks has continued to decline. Read PDF to know more!

1. The Ultimate eCheck FAQ: 7 Common Questions Answered
In this modern age, online transactions have boomed. As a result, all the businesses who want
to improve their payment process have accepted them. However, as many companies have
changed how they buy and sell goods over the past years, demand for physical checks has
continued to decline.
This is why the most of the popular online payment methods prefer the use of eChecks.
Here are the 20 frequently answered questions and answers about eChecks
Have you ever come across these questions that cluttered your mind with a lot of doubts?
Even the simple questions, what exactly is an eCheck? How do merchants pay while using
them? Are eChecks even safe to use? What type of businesses should incorporate them?
Question- 1 What is an eCheck?
Answer 1-eCheck is the digital version of the paper check used to process online payments
and use the Automated Clearing House (ACH) network. With the help of an eCheck, the
deposited fund gets withdrawn from the payer’s checking account and even gets transferred
over the ACH network and deposited into the payee’s checking account.
Question 2- Are you confused about how does an eCheck processing work?

2. Answer 2- You don’t need to be confused more as the purpose of eCheck processing is to
help customers receive the most accepted form of payments. The entire electronic processing
system is streamlined into 4 simple steps-
Request Transaction Authorization-
The customer who transfers the payment must authorize the amount requested by the
recipient to get withdrawn from their account. Moreover, costs can get approved through the
signed order form, recorded voice approval, and online payment form.
Set Up The Payment- When the customer approves the payment, the merchant also initiates
the payment process by inserting the linked financial data like checking account and routing
number into their online payment gateway processing software.
Finalize The Transaction- After receiving the verified financial information by the payment
gateway (processor), the merchant saves and submits the payment to their bank. Then, the
payment is sent to the ACH network to initiate the eCheck transaction process.
Confirmation of Payment-
In the last step, the eCheck transaction amount gets withdrawn from the customer’s checking
account and deposited into the business’s bank account. Then, the payment confirmation
receipt gets transferred to the customer.
Question 3-Do eCheck services cost processing fees?
Answers 3- While processing any online or in-person transaction, there are always specific
fees, and eCheck services are no different. Moreover, these fees are highly essential because
they reflect the payment methods that merchants can accept.
As eCheck processing rates depend upon the business, provider, and other variables, they
usually have a lower cost than other payments. Moreover, eCheck transactions generally
include fixed and flat rates that fluctuate between zero to one percent of the entire amount.
Question 4-What type of payments can be made with eChecks?
Answer 4- The lower processing fees linked with eChecks have made them a known
payment method for regular one-time purchases.

3. eChecks get utilized for a variety of transactions. Some of the most common types of eCheck
payment transactions include-
Ø Subscription-based services and membership plans.
Ø Mortgage and monthly rental payments
Ø Automatic and loan repayments
Ø Legal retainers
Ø Credit card payments
This is because these transactions are on the verge of becoming the most popular
transactions, and there are more than one ways in which your business can take advantage of
eChecks. However, even before you begin to explore these options, it has become vital for
you to understand the difference between echecks and other payments.
Question 5-How do eChecks, EFT, and ACH payments differ?
Answer 5-As the list of online payments has constantly grown and therefore, it doesn’t
remain uncommon to amalgamate different digital payments like eChecks, electronic funds
transfer and ACH payments which frequently confuse the people.
Here is a short explanation about each of these different methods which help you to gain
better understanding-
EFT Payments
An EFT Payment gets referred to as an ePayment. ePayment gets classified as the electronic
transfer of funds from one bank account to another through an online network. The term
“EFT Payment” covers a broad number of different transactions. This payment type doesn’t
include cash or involvement from other bank employees.
EFT payment consist of transactions such as-
- Wire Transfers
- eChecks
ATM Withdrawals
- eWallets
- ACH Transfers

4. - Direct Deposits
- Electronic Benefits Payments
ACH Payments
The automated clearing house (ACH) network is the batch processing that processes and
transfer funds between merchants and banks. At the time of using the ACH network,
merchants process payments by adding the customer’s associated bank account information.
The term ACH transfer or payment also gets referred to as the type of electronic bank-to-
bank transaction which gets processed through the ACH network. These types of payments
are set up through banks and financial institutions that allow merchants and customers to send
and receive payments. The ACH payments are processed as direct deposits or direct
payments. Some examples of these payments include paychecks, interest payments and social
payments apps also.
ACH payments get processed with two methods-
ACH Debit Transactions: Money withdrawn from an account to a consumer or merchant
account that receives the payment also initiates the transaction.
ACH Credit Transactions: Money that gets directly deposited to the consumer or merchant
account that makes the payment initiates the transaction.
Almost all ACH transactions come within the category of EFT payments as they are
processed electronically. Although, not all EFT payments get classified as ACH payments
until the ACH network processes the payment.
eCheck
An eCheck is labeled as both ACH debit and EFT payment as it uses electronic funds that get
transferred through an Automated Clearing House Network. eChecks are classified as ACH
debits because they enable authorized payments to get pulled directly from the checking
account for the merchant, consumer, and even organization. These checks are also used for
batch processing.

5. eChecks are called EFT payments because they involve the electronic transfer of funds from
one bank account to another through a reputed online network. eCheck payment differs from
ACH payment because they get processed through the ACH network.
Question 6-Do you know how paper checks and eChecks differ?
Paper checks and eChecks function similarly, and there are few differences between them-
You need to know that eChecks are derived from paper checks. The most apparent distinction
could be seen in their technology.
Some significant differences between eChecks and paper checks are
eCheck processes get much faster than paper checks as they require fewer steps. Apart from
it, eChecks are much safer than paper checks and usually come with many security features
like authentication, encryption, and digital signature.
Paper checks are more susceptible to human error and malicious activity. This is why paper
checks usually incur more costs than eChecks.
eChecks consist of unlimited data storage capabilities, whereas paper checks demand users to
enter information if they want to keep records manually.
Even after the eChecks’ growth in popularity and predictions linked to paper checks turning
obsolete shortly, both have remained relevant for industries and markets.
Question 7- Are eChecks secure and safe to use?
eChecks are labeled to be reliable and safe digital payments due to different security
measures incorporated by them.
Many eCheck transactions come with different security components, such as-
Digital Signature- Each transaction consists of an encrypted digital signature with
timestamps to ensure checks do not get maliciously duplicated.
Encryption- All eCheck transactions are encrypted through some unsecured networks.
Authentication- The payment provider verifies the party submitting the account so that no
fraudulent payments get submitted.

6. Certificate Authorities- Digital certificates get issued by CAs to protect data, encrypt
transactions, and enable secure communications.
Public Key Cryptography- It is considered part of the encryption process that ciphers
eCheck data to protect it during transit.
Final Read
The sky is the limit when it comes to the usage of eChecks. Whether related to products or
services, a merchant account holder can quickly pay for it through eCheck services.
It is the type of payment that remains the most popular option for higher-cost items, including
mortgage payments, monthly rent, car loan repayments, and retainer fees.
Originally published: https://bit.ly/3tO7gDO