This is nothing but an electronic check through which online payment can be done. The money that you are supposed to pay would be electronically withdrawn from the account. It would then be transferred to ACH network and it would get deposited to the account of the payee.
Those who have an ACH merchant account it is easy to withdraw payments from the bank account of their customers.
The customer is the one who should authorize the payment. This can be done with the help of a signed contract or just by accepting the terms and conditions of the website.
Working procedure of e-check
You have to know that e-checks are similar to those of paper check process. However the former is quicker than the latter. With the paper check, the customer needs to manually fill in the details and send it to the payee they are in need to pay. However if you use e-checks, the technology permits you to process it electronically which saves both time as well as paper wastage.
Steps to process an e-check:
Authorization of request:
It is a must to get the authorization from the customers in order to initiate the transaction. You can do this through online payment form, phone chat or with order form.
Set up of payment:
Once the authorization is complete your payment details would be converted in to online payment processing software. Recurring schedule details are included if you make a recurring payment.
Check and submit:
After the payment details are properly entered in to the software either save or submit option is clicked by the business. Only after this the ACH transaction process starts.
Payment and Deposit:
The payment is withdrawn automatically from the account of the customer.
The customer also receives the payment receipt automatically. The money is deposited in the bank account of the merchant and this would be done within one to five business days after ACH transaction is initiated.
Does EFT and ACH is similar to e-check?
The full form of EFT is known as Electronic Fund transfer. There are many types of financial transfers:
- ACH disbursements
- Direct deposits
- Wire transfers
- Electronic benefits payment
- ACH is known for Automated clearing house
These are the e-networks that are used by the financial institutions that are present in the United States and this offers the platform for those payment processing companies.
We would explain you about the differences between EFT, ACH and e-check. You know that e-check is the electronic check which is the type of electronic fund transfer (EFT). This uses ACH which is the automated clearing house network in order to do the payment.
Processing ACH checks
What kind of payment can you do with e-checks?
The merchants use credit card payments more than e-checks. Since this is the case it is sure to accept the e-check payment for high cost products like car payment, mortgage, gym membership, legal retainers and rent
Can you use e-check for recurring payments?
One of the most common recurring payments is known as e-check. You might have known about the term called as “Recurring ACH payment”. If you have already known about it then also know that it is the same as of e-check payment.
The managers of the property would ask the residents to offer the e-check for doing their rent payment. This helps them to automatically deduct the rent from the tenants on a particular day every month.
What is the time span to clear e-checks?
This would vary from one provider to another. The funds are actually verified within 2 to 3 days after the business transaction is initiated. If the payer has the necessary fund in their account then the transaction can happen within 3 to 5 business days.
After this period the money is transferred from the payer account to the payee’s bank account.
How to send e-check payment?
If you want to send an e-check payment, the person to whom you are transferring must have an ACH merchant account. Only this account gives them the opportunity to use the ACH network in order to accept the payments that are one via electronic fund transfer.
What are the two ways through which you can send an e-check payment?
- you can make a call, the business person would ask about your checking account as well as the routing numbers. The input would be these numbers and also the amount that should be paid. The inputs are put on the online payment terminal.
Once the process option is clicked the payment would be deducted from the bank account of the payer and it would be deposited to the payee’s account.
- The payee would send the online payment form and you have to fill in the routing number and the checking account. In addition to this, even the amount to be paid should be mentioned here. When you click on the submit button you are giving the authorization for the payee to take the amount that is mentioned from your bank account.