Improve Your Company: What is an eCheck and How Will It Benefit Your Business?

what is an echeck

Still using checks in this era?

What’s stopping you from joining the electronic bandwagon and start using eChecks instead?

Many merchants now prefer it over paper checks because of its many benefits. It’s easy to use, it’s safe, and it’s more convenient.

However, there are many businesses which might not know about it yet.

If you’re one of those and you want to know the answer to “what is an eCheck?”, you’re in the right place. Read on to find out what an eCheck is, how it works, and how it can benefit you.

What is an eCheck?

An eCheck isn’t that much different from a physical check. It’s the electronic version of a paper check that you can use to pay for stuff online. It contains the same information as a paper check and it has the same legal framework as its basis.

In simpler terms, it’s a type of a payment method that allows the payer to transfer money from his/her bank account (usually a checking account) to the receiver’s bank account.

You might think that it’s similar to other electronic payment methods, so how is it any different? To find that out, let’s see how it works.

How Does It Work?

As you would in a paper check, you’ll have to “write” the eCheck. The only difference is that you then give it to the recipient via electronic transfer.

After which, the payee receives payment when the bank clears it. The payer’s bank then charges it the bank account for the electronic check amount.

That’s a simple way of putting it, but let’s delve on this process deeper.

Step 1: The Payer Authorizes the eCheck

The payer first needs to authorize the transaction. He/she can do this via an online payment form, a phone conversation, a signed order form, or other methods. The permission can be for a single transaction or for a set of transactions thereafter.

Step 2: The Payer “Writes” the eCheck via an Online Payment Terminal

Next, the payer needs to enter their information. This the amount, the checking account, and the routing numbers.

If they’re using a specific online payment gateway, they may need to enter their details only once. This particular payment gateway will record their information. They only need to log in again to make another transaction.

Otherwise, they’ll have to enter their information for every transaction.

After this, the payer then needs to click “Submit” to transfer the eCheck to you. Note that you’ll have to be ready to start accepting electronic checks. This can be possible through companies like High Risk Solutions.

Another way to “write” the check is through a phone conversation. The payer will relay his/her information through the phone, and the person on the other end of the line enters it on an online payment terminal.

Step 3: The ACH Network Processes the Transaction

Clicking the “Submit” button then starts the ACH (Automated Clearing House) transaction process. The ACH will process the electronic check alongside several other eChecks in a batch.

When the ACH receives the information, it will forward it to the bank, which will then check if there are funds to cover the transaction. If there are no issues, the bank will give the go signal to the clearing house.

Note that this step can take 24 to 48 hours or longer for security reasons.

Step 4: The Payee Receives the Money

The ACH will then give the information to the payee’s bank, which will credit the amount to his/her bank account. If the recipient is also using the same payment gateway like PayPal, the money from the eCheck PayPal payment will go toward his/her account on the platform.

The Benefits of Using eChecks for Your Business Transactions

If an eCheck doesn’t have many differences from a regular check, then why should you use it? Read below to see why companies are preferring electronic checks nowadays and what benefits they get from it.


One of the best things about an eCheck is how convenient it is to issue one. You don’t need to go to the bank to deposit it, and you don’t have to use an electronic scanner either.

Because the payer fills the information online, there are fewer chances for errors as well. Have you ever experienced receiving a check that the customer forgot to sign? Such cases are not possible in an eCheck payment because the payee will have to authorize it first.

Instant Processing

When you “write” an eCheck and submit your information, it will start the automatic process of going into the ACH for clearing. In a paper check, this process doesn’t start until you have it scanned or deposit it to the bank.

This can reduce the processing time, which means you receive your money sooner as well. While it may take longer than another payment option, such as a bank-to-bank transfer, it’s still faster than a check.

The process is pretty simple as well for any customer worldwide, especially to those who use paper checks on the regular.


The best advantage an eCheck has, however, is the security it offers. They utilize online security techniques like encryption, authentication, duplicate detection, and such. There are many layers to its security, ensuring that your details are safe.

These techniques also prevent fraudulent transactions. Thousands of merchants worldwide trust and rely on this method.

Other Benefits

Another advantage of an eCheck is its cost. It’s much cheaper than a paper check, which costs $1.22 on average. An electronic check can cost only $0.55; this is over 50% cheaper than a paper check.

It’s also good for the environment; it promotes paperless transactions. Furthermore, you can have your customers schedule their eCheck payments via their chosen online payment gateway.

Use Electronic Checks Now

Now that you know the answer to “what is an eCheck?”, it’s time to start considering it as a better option for your business. Don’t worry, it’s easy to understand and your customers will prefer this method, too. They’re more convenient to use and more secure in today’s digital age.

But there’s more to discover. There are more ways to improve how your business works.

If you need more tips, whether for business or for life in general, visit our blog today. Learn more about anything from writing scholarship letters to making your house handicap-proof.