Every business has to have an online payment system in today’s e-commerce driven marketplace. When it comes to making a payment online, several methods are available, including credit cards, debit cards, e-wallets, and echecks, which are fast becoming popular and taking a chunk of the market away from credit cards. An e-check is an electronic check processing option that works like a physical check- instead of transferring sensitive credit card information online, which is prone to security breaches, an e-check simply transmits the check information along with some other details, thereby keeping sensitive credit card information safe. While an e-check is not perfectly secure, it does offer some benefits related to security, especially when compared to a credit card.

Making payments or accepting checks online is relatively straightforward. There are two basic ways to accept check payments online. In both methods, a customer completes an order by checking out much the same way as in the case of a credit card transaction. The difference comes in when payment information has to be entered. In the first method, instead of filling in credit cards numbers, expiration dates and verification codes, a user will need to enter the information on the physical check (which is in the customer’s possession). This information will then be processed through the ACH network and upon approval, the check information is transferred to the seller, who can then take a physical printout of the check and deposit it in his or her local bank. The critical component here is the software that processes the check information and provides an electronic version of the check that can be printed out by the seller at his own location.

This can be accomplished via e-checks or electronic checks. In a typical transaction, instead of providing credit card details, the customer will enter bank routing information and check number. Echecks are essentially a replacement for paper checks, as far as the buyer is concerned. The seller may still have to print the physical checks and deposit them with the bank at periodic intervals. However, services are available whereby the printing can be outsourced to a processor and the payment is directly deposited into the seller’s account.

In the second method, the need to take a print out for deposit is eliminated, as the check gets directly cleared online and is settled by both payer and payee banks directly. In this method, an online payment gateway which has check processing facilities will collect bank account, routing and other information and transmit funds through the ACH network.
Also, check payments are contingent upon funds being cleared by the payer’s bank. This method is called ichecks or internet checks. This method completely removes the role of physical checks and the processing is

In order to start accepting checks online, a merchant will need to sign up with a check processing service, which will provide a payment gateway software to process check payments via the internet. This payment gateway will collect the necessary information including bank information routing number as well as the check number. It will also be responsible for processing the payment via the ACH network. Typical fees associated with such accounts include set up and transaction fees. There may also be check guarantee and verification fees as well as reserves, depending on the chosen provider.

A key benefit of accepting checks online is that nearly everyone is familiar with checks and transacting check payments and receipts involves much less training, compared to credit cards. Hence, a new e-commerce customer will find it much easier to just go in and input check information on a payment gateway, rather than enter credit card information, CVV and other numbers. In addition, check processing fees are typically lower than credit card processing fees. The obvious drawback is that a check is not cleared instantaneously, and most sellers will only ship the item once the funds clear. Hence, there will be a longer waiting period for a buyer, compared to if he or she conducts a transaction through a credit card. This is where check guarantee and verification come in. Many service providers will provide either seller protection terms or check guarantee and verification, within the processing function.

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