Today, making payments by check is quite common. If you are a business owner and want to receive payments from your customers via electronic checks, this article can help. In this article, we are going to better understand how this payment system works. We will address some common questions related to eChecks. Keep reading to know more.
What is an eCheck?
Essentially, an electronic check included an online payment system. In this system, money is withdrawn electronically from a person’s checking account. The transfer is done through the ACH network. Finally, the money is deposited into another bank account.
If you have an ACH business account, you can withdraw payments for services or goods from your customers’ bank accounts. However, it is only possible if the customer authorizes the electronic payment through a signed contract.
How does the processing work?
Unlike paper check processing, electronic check processing is much faster. Customers do not have to complete a physical check. Nor is it necessary to send the check to the company. With current technology, the entire process can be completed electronically. As a result, everyone can save a lot of time. Also, there is no waste of paper.
4 main steps
Below are the four steps that complete electronic check processing. Once you have followed 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 give this modern payment method a try.
Request authorization
If you are a business owner, you must obtain authorization from your client or client to initiate the transaction. Usually this is done through a phone conversation, an order form, or an online payment platform.
Payment settings
Once authorization is complete, payment information is entered into the online payment system that processes each transaction. In case of a recurring payment, the system also includes the information required in the recurring schedule.
Completion and shipping
As soon as the payment information is added, it is sent to start the ACH transaction process.
Payment confirmation
The payment is withdrawn from the customer’s bank account automatically. Upon receipt of payment, the funds are deposited into the company’s bank account. Generally, the funds deposit process is completed within 5 business days of the start of the ACH transaction.
Simply put, this was a brief introduction to electronic payment processing. If you are a business owner, you can introduce this system to your clients to facilitate payments. This will be a beneficial deal for you and your clients. Your customers will be able to make the payment with the help of their mobile devices and the funds will be transferred to their business account in a few minutes.