subject: Electronic Checks Valuable Payment Option [print this page] Electronic checks are the most popular alternative payment processing option.Merchants offering echecks often experience sales lifts of 8-20%.Echecks merchant accounts can be established for standard ecommerce merchants and high risk merchants. Electronic checks are simply a replacement for paper checks.More than 90% of US households have checking or savings accounts.Only 50% of US households have credit cards.Therefore, it is easy to see how echecks are one of the easiest ways to expand market reach and capture sales from customers who dont have credit cards or simply prefer to pay by electronic checks.
Electronic checks or echecks can be processed through the ACH payments network or through Check 21 technology.High risk merchants usually use Check 21 echecks.Lower risk merchants often use ACH payments for echecks. For ACH payment processing, echecks include the following:
WEB (Internet based echecks)
ARC (mailed payment converted to electronic checks)
POP (electronic checks conversion at POS)
RCK (NSF electronic checks recovery)
TEL (telephone echecks)
PPD (echecks for consumer pre auth recurring one-time debit)
These applications are called echecks because the merchant or biller uses a check as a source document for the consumers account information (RCK, POP, ARC) or the consumer is prompted to use their check as a reference to provide their account information (WEB, TEL).
eChecks are used by merchants and billers as optional payment methods that are faster, more convenient and more secure than traditional check processing, which benefits both the company and the consumer.
Echeck Merchant Accounts. Integrating echecks with an website is accomplished via an application program interface ((API). Sometimes a credit card processing gateway will include an electronic checks module. If both echecks and credit card transactions are processed through the same ecommerce gateway, the merchant benefits from centralized reporting and simplified merchant account transaction reconciliation.The disadvantage of a integration with a credit card processing gateway is that echecks processing fees will be higher since the gateway is a middleman.
When a buyer checks out, electronic checks are one of the payment options.When echeck is chosen, the buyer enters the information, including routing and account numbers. Consumer authorization is required is required with specific language that authorizes the merchant to process an electronic check ACH debit transaction on behalf of the consumer.The authorization language is followed by instructions to the consumer to Accept or Cancel echecks authorizationAfter the consumer clicks Accept, electronic checks are submitted and sent to various authentication databases for an approval response including verifying echecks bank routing number and checking account number for accuracy. The merchant establishes the refund policies for echecks, which are usually the same as for credit card processing.Merchants can refund directly back to the customer through the ACH payments with permission from the customer.
