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FREQUENTLY ASKED QUESTIONS



We hope that this FAQ section will help you get a clear picture and remove any
doubts that you may still be having pertaining to eChecks.

What is an eCheck?

We all have heard about checks, traveler checks, cashier and banker checks but
what the heck is an eCheck? The ‘e’ simply means electronic. eCheck or
electronic check is nothing but the electronic/digital version of old
conventional checks. Yes, you might still be using those paper checks, eCheck is
just their evolved form, the same old wine in a new bottle, so to say.

Checks have always been a flexible mode of payment since their underlying
importance is in the information on them (the receiver, amount & the signature).
The global transaction made by conventional checks has been decreasing due to
the penetration of cards and  digital payment methods but eChecks have picked
the baton right where the conventional check dropped it. A paper system is
inefficient with the demands of the modern world. It is expensive considering
the ink and paper and also allows errors to creep in since data from paper
checks is entered onto computer systems. They have to be stored physically,
which occupies space and is more prone to damage, theft and fraud in comparison
to eChecks. eChecks on the other hand are completely electronic and do not use
an inch of paper during the whole transaction cycle. They use digital signatures
for authentication and funds are transferred between the bank accounts once
the eCheck is cleared.

However, in some ways eChecks are similar to paper checks; they contain the same
info like routing nos, checking A/C no, the amount payable, person/company made
out to etc. They can also bounce, can be cancelled and float till they are
cleared just like the conventional checks. eCheck payment is exponentially
simpler and less complicated than paper checks and a safer and more precise way
to exchange funds.

What are the components of an eCheck?

You have seen how an eCheck differs from conventional checks and have grasped a
basic concept of eChecks, now let’s get into details. First, we will understand
the different components or fields in an eCheck and then we will explain to you
how the eCheck system works in the real world.

Bank name and address

Name of the payer with address

Date when the eCheck is made out

The number of funds to be transferred

9 digits routing number

Bank account number of the payee

Check number

Transit code for the eCheck

How does eCheck processing work?

eChecks are processed over the ACH (Automated Clearing House) network. The whole
process consists of 4 steps: authorization, payment set-up,
finalization/submission of the request and finally confirmation of payment
(funds deposition). Let’s now discuss each of these steps in a bit more detailed
manner as to what actually happens from the point you make out to an eCheck to
the point when funds are received at the recipient’s end.



1. Check Verification
After both parties i.e. the payee and the payer agree to an eCheck transaction.
The first step is when a user fills up an eCheck authorization form and sends it
to the merchant, who after receiving authorization looks at the eCheck details
and verifies them. The payer can conduct this step via email, by filling up an
online form or through a telephone conversation. If the payer’s payment
information is correct the merchant begins to initiate the transaction by
preparing it to forward to their eCheck service provider.

2. Setting up payment:
Initiating the transaction means entering the payer’s details into the eCheck
payment processing software. Sometimes this information is automatically picked
up by the software via the online form (it must be entered manually in case of
authorization by email or phone call). If the payment is recurring, it is marked
in this application in this step. Thus a single eCheck can be used to make
multiple payments in case of rent, subscriptions, periodic installations,
utility payments etc.

3. Submission of request
If the information entered is final and correct, the merchant hits the
send/submit button and the eCheck goes into the floating period. This marks the
start of the ACH payment transaction process. Your eCheck processing has begun
once this step is complete.

4. Confirmation of payment
At this stage, the information reaches the eCheck payment service provider who
initiates the transaction. This is done by forwarding the request to the ACH
network. Once the payment or eCheck transaction is cleared by the ACH network,
the funds are directly withdrawn (debited) from the payer’s account and
deposited (credited) into the payee’s account.



Who can use eChecks?

Businesses that indulge in regular transactions can use eChecks for
sending/receiving payments on the internet.

Are eChecks made out on paper?

eChecks are basically electronic checks, mostly they are electronically used and
processed. However, you can also print these on normal printing papers.

How long does it take to get on-board an eCheck payment service?

It can take from a few minutes upto 2-3 business days to get on-board the eCheck
payment service.

What type of accounts can be used to debit or credit eChecks?

Consumer checking account, corporate checking account, saving account and
consumer accounts can be used to credit and debit eCheck transactions.

Can I make one time payments with eCheck?

Yes, you can make one time payments with eCheck services.

Can I make recurring payments with eCheck services?

Yes, you can opt for recurring payments with eCheck services. eChecks are the
preferred way to make recurring payments.

Are eCheck transactions carried out/processed over the weekend/non office days?

Verification of eChecks can be done any day, sales and refunds can be also
submitted any day of the week but funds will only be settled only on open bank
days, i.e. Monday to Friday and on Saturday in some organizations.

Are eChecks sent out as individual transactions or in bulk?

eChecks are usually sent out in bulk for processing by the merchant's eCheck
service provider to the ACH network.

Can an eCheck be annulled?

Yes, as long as the eCheck transaction is not already in progress it can be
annulled or made void.

What does an eCheck return mean?

Consumers bank with their checking accounts can reject eChecks due to a number
of reasons like insufficient funds, unfunctional account, discrepancies in
eCheck related details etc.

When can eCheck funds be settled?

eCheck funds can be settled next day or within 2-3 days at the earliest.

What do I do if I discover a discrepancy with transactions?

Report to the police and cyber crime unit in your area immediately as soon as
you notice discrepancies in your eCheck payment books or smell foul play.

What is the ACH network and how does it work?

In the payments universe, the ACH occupies a very special place. ACH stands for
Automated Clearing House, and as the name suggests it is responsible for
clearing all kinds of electronic and digital payments. From depositing your
salary into your account to processing debit/credit transactions, ACH takes care
of all of it.

Yes, the ACH network handles all kinds of digital transfers and electronic
payments and much more. Processing of funds in-between different modes, direct
money transfers, recurring payments etc. are all processed via the ACH network.
Thus this system ends up processing millions of transactions each day. This
whole system is automated and works all on its own. It communicates between
banks telling were to debit the money from and where to credit it.

ACH transfers are beneficial in several ways since they are low fees or free,
they are fully automated and do not require human interference at any point in
the transaction. Once the account from which funds have to originate is acquired
the ACH network gets to working the transaction.



How to use eChecks for sending/receiving payments?

Well, you have to literally make zero effort to get on this wagon. You already
know everything that you need to know about filing an eCheck because it’s the
same as paper checks. Anyway, we will still reiterate the process for you. It’s
fairly easy and simple. You won’t need a pen or a checkbook, what you’ll need
are a browser and a keyboard. Let’s begin:

1. Check your bank account balance
This is check/eCheck writing lesson 101, you need to ensure that you have
sufficient balance in your account before proceeding to write an eCheck. If you
don't have the required balance, the eCheck will bounce and you definitely don't
want that. If you don't have the funds in your account, 'do not write the eCheck
as the 'float time is very less and your plans of depositing the funds before
the check clears are literally futile here.

2. Fill up the eCheck request form
Pull up your eCheck services and fill up the form online on their website, on an
application/software they have provided or complete the authorization via an
email or a telephone call. Either way, in this step all you need to do is pass
on the accurate info that will go into your eCheck to your eCheck service
provider. Enter all the details correctly.

3. Check details and press submit
Check again for you may have made errors entering so many numbers in separate
fields. If you're sure that all the information you have provided is correct,
click the OK/submit button and you're all set. This is where your part ends. It
only takes a few minutes, just like a paper check.

When should you use eChecks?

Spending was never easier. Today, there are scores of ways in which you can part
with your money. It can be a swipe, a wave, or a dip of the card. If that’s not
enough you can pay simply by using your fingerprint or myriads of other forms of
digital payment systems. So, in this multidimensional payments market, where
does eCheck fit in? We will tell you exactly when and where you should pull out
the eCheck, well not quite literally!

1. Large amount transactions
In comparison to other payment methods, eChecks are fairly cheap since their
processing charges are minimum. This is the reason why it is beneficial to use
eChecks for moving large funds between accounts. eChecks are also a good option
for smaller funds since they do not take a large percentage of the transaction
amount as processing fees.

2. Recurring payments
For recurring payments like rent, subscriptions, monthly or yearly instalments
and utility services like gas, electricity etc. you can use eChecks. Simply
cutting one single eCheck and marking it for recurring payments will do the job
and you wouldn’t have to bother with making repeated payments.

3. In place of paper checks
If you are still a fan of paper checks, now is the time to change sides. Use
eChecks as they are safer, faster, and convenient and the best part is they are
paperless and you wouldn’t have to go to the bank too! Save trees, go green.
Think sustainability, switch to eChecks today.

4. Lack of funds on other payment systems
When you are low on funds in other payment accounts, you can use eChecks to pay.
If your eCheck payment account also does not have the required funds, don’t
worry as you get a ‘float time’ of 3-4 days in which you can arrange funds.
Still, it has an edge over other payment methods which won’t go through if your
balance is below the required amount.

5. When delivery issues are not pressing
For eCommerce payments, eChecks can be an amazing payment option. Since a day or
two in delivery won’t hurt, eChecks can be used here to make transactions
without worrying about an immediate transfer of funds.

6. To make things easier for the customer
Every business aims to make things as easy as possible for the customer. eChecks
offer a level of ease and convenience for the customer to make payments.
Accepting eChecks means a whole lot more customers who may not be using
debit/credit cards or other digital modes of payment.

7. When you pay the fee for the transaction
The transaction may be paid by the payer or the payee. If you’re paying it then
go for eChecks as the transaction fee for eCheck processing is lower than any
other payment method out there in the market.

8. When you want to play it safe
Most eCheck service providers do not charge any set-up fee. The best part is
that you make up your mind, call up a service and they hook you up with the
eCheck payment system almost instantly.

9. No devices required
eCheck processing does not need any gadgets or devices like POS machines etc. So
you don’t have to worry about spending money on those machines and setting up
which is perfect for small businesses.

What are the advantages of using eChecks?

We have mentioned lots of advantages of eChecks between the lines in the text
written above. However, there are still a few left to point out. We will
reiterate all of them here for your information. eChecks have the upper hand
when it comes to safety, ease and transaction fees. Well, what more could a
business ask from a payment method? Find out:

1. SAFER TO USE
eChecks are safe when it comes to processing high-risk payments. They are also
less prone to fraud and cyber intrusions. They offer breathing space both to
customers and the merchant and keep security risks at a minimum.

2. GREATER ACCURACY
eChecks are accurate since they are verified at several levels of the
transaction cycle. In case of faulty data or discrepancies, they can be promptly
cancelled or withdrawn from payment.

3. SPEED OF TRANSACTION
eChecks are quick when merchant payouts are considered and they are also a fast
way of transacting international payments which is very beneficial for payouts
of eCommerce businesses.

4. LOWER TRANSACTION FEES
eChecks have the least transaction fees when it comes to processing payments.
They provide a win-win scenario for both customers and the business owners
irrespective of who is paying the transaction fee.

5. USER FRIENDLY
It is very simple to fill out a paper check, eCheck are even easier. Users find
themselves at ease when paying through eChecks mostly because they are
convenient and very user friendly modes of payment.

6. ECO-FRIENDLY
Think of the millions of trees you are saving which would otherwise have been
chopped to print those paper checks. This method is not only eco-friendly but a
sustainable one too.

7. LOW RISK
eChecks are low risk considering the fact that they are verified and
authenticated at several stages. You can carry out those high risk or large
volume transactions via eChecks without worrying about a thing.

8. ZERO SET-UP FEES
Most eCheck service providers do not charge any set-up fee. The best part is
that you make up your mind, call up a service and they hook you up with the
eCheck payment system almost instantly.

9. HASSLE FREE
Conventional checks required a lot of lifting and transporting between different
areas but that’s not a problem with eChecks. The system is totally digital.
Ready to rule the world of payments.

How eCheck frauds occur?

Theft of account and routing numbers from the invoices or eChecks is the most
common type of fraud associated with eChecks. Malicious players can steal
important data from users and misuse this data to create fake eCheck profiles.
In this regard the ACH (Automated Clearing House) network that processes eChecks
can also be compromised by cyber attackers to steal private information and
siphon off funds from the accounts of unsuspecting users. Checking account
number and a routing number are the two key pieces of information required by
cyber thieves to execute their theft. Criminals obtain these details by phishing
users into installing a malicious software which also installs keylogger onto
their systems. Hundreds of millions US$ are stolen every year this way.

Detecting & diffusing frauds
Users will always remain at risk from phishing attacks and thus the strongest
defense against such attackers is to stay alert and wary of fraudulent emails.
Watch out for any suspicious activity and do not get caught into the trap of
fraudsters. If there is a transaction or deduction in your account that you
didn’t authorize, report it immediately so that such threats can be detected.
Monitor and review your accounts everyday to become aware of any malpractices.
‘Filter’ and ‘block’ mechanisms to ward off malicious links and to block
unwanted links must be applied to ensure an added layer of security. An active
action by filing a police report must be taken once you discover a fraud in your
account or in your organization’s transaction process.

What is eCheck fee structure?

You must be curious to know about the different types of fees associated with
the eCheck payment system. How much does it cost to get eCheck for your
business? Find out here,

Setup fee: A minimal eCheck setup fee to be paid only once. Some organizations
like us also offer free/zero setup features to promote the acceptance of this
mode of payment.

Monthly fee: A minimum fee charged on a monthly basis for availing eCheck
services on your business website.

Per transaction fee: A percentage of the transaction amount is charged as the
transaction and it depends on the amount of transaction. Usually it is
considerably low in comparison to the transaction fee charged for debit/credit
card processing services.

Chargeback fee: This is the fee charged for each chargeback (fee for
incomplete/canceled or refund transactions).

eCheck for high risk businesses?

Some businesses are considered high risk in nature, this includes the
adult-oriented industry, eCommerce, tech support services industry and a few
other notable businesses. Due to their nature they are called ‘high risk
businesses’ with no fault of their own and it becomes really tough for these
businesses to find a reliable payment processing system. At these times, eCheck
comes to rescue these businesses. For this reason several high risk merchants
prefer eCheck as a payment system for their trade. This is due to a number of
advantages like low processing fee, safety from high risk payment methods like
debit/credit cards etc. and to offer the customers an easy way to make payments.
Most of the people who do not have cards can still pay via eChecks. They offer
faster and cheaper processing to merchants and make the job easier on both ends.


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