Nowadays, making payments through a check is quite common. If you are a business owner and you want to receive payments from your customers through electronic checks, this article can help you. In this article, we are going to get a better understanding of how this payment system works. We will address some common questions related to eChecks. Read on to find out more.
What is an eCheck?
Basically, an electronic check comprises an online payment system. In this system, money is withdrawn electronically from the checking account of a person. The transfer is made through the ACH network. Finally, the money is deposited into another bank account.
If you have an ACH merchant account, you can withdraw payments for services or goods from the bank accounts of your customers. However, it is possible only if the customer authorizes e-payment under a signed contract.
How Does the Processing Work?
Unlike paper check processing, electronic check processing is a lot faster. Customers don’t have to fill out a physical check. There is no need to send the check to the business either. With today’s technology, the entire process can be completed electronically. As a result, everyone can save a lot of time. Plus, there is no paper wastage.
4 Main Steps
Given below are the four steps that complete the processing of electronic checks. Once you have gone through these simple steps, you will have a solid understanding of how an electronic check processing system works. Whether you are a customer or business owner, you may want to try out this modern method of payment.
If you are a business owner, you need to get authorization from your client or customer in order to initiate the transaction. Typically, this is done through a phone conversation, order form, or an online payment platform.
Once the authorization is complete, payment information is inserted into the online payment system that processes every transaction. In case of a recurring payment, the system also includes the required information on the recurring schedule.
Finalization and Submission
As soon as payment information is added, it is submitted in order to initiate the ACH transaction process.
Confirmation of Payment
The payment is taken out from the bank account of the customer automatically. After the payment received, the funds are deposited into the bank account of the business. Generally, the fund depositing process is completed within 5 business days after the initiation of the ACH transaction.
Long story short, this was a brief introduction to electronic payment processing. If you are a business owner, you can introduce this system to your customers in order to facilitate payments. This will be a win-win deal for you and your customers. Your customers will be able to make payment with the help of their mobile devices and the funds will be transferred to your business account in a few minutes.