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What Is An eCheck?

So you’ve made a significant and expensive purchase and you can’t wait to pay for it. Because of the price tag, you decide that maybe you will use a check to pay for it. You stroll up to the merchant, ready to whip out your checkbook to pay, and the merchant smiles and tells you they accept eChecks too. An E-what now? 

An eCheck Explained

An eCheck is probably a term you’ve heard floating around for a while now, but never really looked into it. Well, an eCheck is simply an electronic version of a check. Instead of a paper version, you now have a digital version. 

When you attempt to make eCheck payments, the money will be electronically deducted from your checking account. It will then be transferred through the Automated Clearing House (ACH) network and voila! Straight into the account of the receiving party. 

The ACH network is a network that financial institutions in the United States utilise. A business needs to have an ACH merchant account to receive payment for goods and services from the customer. All payments need to be authorised by the customers. A customer can do this by signing a contract or accepting the terms and conditions on the website. Alternatively, payments can also be authorised via a voice recorded conversation. 

Is An eCheck Better Than A Paper Check?

Yes, because it gets processed much faster. Plus, you save yourself time and eliminate manually filling out your paper check and send it to the business. Everything can be done electronically and instantly. As a bonus, you don’t waste paper either and do your bit for the environment. 

eCheck options are also becoming the more popular choice since merchants and businesses pay a much smaller processing fee compared to what they would need to pay for credit cards. Therefore, it makes sense for high-cost items like car payments or rent payments, for example, to be paid out in this way. 

eChecks are fast becoming the preferred way to pay for those who have recurring payments to deal with. Automatic deductions can be made immediately on the due date so you never miss a bill payment again. 

The one similarity that an eCheck shares with traditional paper checks: processing these payments is still limited only to business days. This is because financial institutions are still responsible for processing each transaction. Once your payment has been authorised, it can take anywhere from three to five business days for your transaction to clear. This is something to keep in mind if you set up recurring payments. 

Do eChecks Still Bounce? 

Yes, this is another similarity that they share with traditional checks. However, you’re less likely to run into check-bouncing problems. If you’re paying with an eCheck, you would generally have a good idea of how much money is in your bank account. This is similar to making payments online. Before buying anything online, you know how much you’ve got left in your bank account to spare. 

In the event you suddenly do find yourself with insufficient funds, then your eCheck will bounce just like it would with a normal check payment. 

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