| We’ve probably all done it hundreds of times – | | | | take the routing and account number printed on the |
| pulled out our checkbook to pay a bill. It is easy to | | | | bottom of their checks and make payments over the |
| assume that paper check will be manually sorted by | | | | phone, online, or on an automatic schedule. This way, |
| the business, deposited at the bank, and processed. | | | | their payments can be debited from their checking |
| But with the Digital Age upon us, paper check | | | | account, without adding to the balance on their credit |
| processing in this manner is becoming less and less | | | | cards—an important factor in today’s economy. |
| likely, and less convenient. | | | | Plus, with more businesses offering the service, |
| Electronic check processing (eCheck Processing) is | | | | consumers will no longer have to purchase paper |
| changing the name of the game. eCheck processing | | | | checks, stamps, and envelopes. |
| gives businesses the ability to collect the information on | | | | An additional and often overlooked benefit of echeck |
| a paper check and electronically collect money from a | | | | processing is security. An electronic check transaction |
| bank account, using the same secure Automated | | | | passes through far less human hands than a paper |
| Clearing House (ACH) Network that is used for Direct | | | | check—making a consumer less vulnerable to |
| Deposits and Direct Payments. | | | | identity theft, and making an echeck payment a MORE |
| This isn’t a new concept – according to | | | | secure processing method. |
| electronicpayments.org (a NACHA website) – 3.1 | | | | How does it work? |
| billion checks were converted to ACH-based | | | | The Simple eCheck Process: |
| electronic payments in 2007. | | | | 1. Notification – If the business is collecting physical |
| So what are the benefits of converting paper checks | | | | paper checks, the customer is informed the paper |
| into eChecks? | | | | check will be converted to an electronic form. This is |
| Business Benefits: | | | | usually done on invoices or on a sign in the place of |
| Converting eChecks will decrease businesses’ | | | | business. In addition, the customer will receive a |
| operating costs. While it costs on average $1.22 to | | | | notification of the transaction details (often this is done |
| process a paper check, eChecks can be processed | | | | via email). A quality payment solution will do this |
| for as little as. $0.55. In addition to the money saved, a | | | | automatically for the business. |
| business won’t have to focus as much time or | | | | 2. Collection and Conversion – The paper check is |
| resources to process those paper check payments, | | | | converted into a one-time ACH-based electronic |
| including making multiple trips to the bank.eChecks can | | | | payment. Check scanners enable businesses to do |
| also help improve cash flow and on-time payments. No | | | | this quickly and efficiently. The business then keeps the |
| longer does a business have to wait for the check to | | | | check, or copy of it, for 2 years as a “receipt” |
| arrive in the mail – echecks can be accepted over | | | | of the payment. |
| the phone or through electronic invoicing – | | | | 3. Processing –The payment information is then |
| whichever is more convenient for the customer. If your | | | | electronically submitted to a processor and then to the |
| business uses a quality online payment processing | | | | financial institution via the secure ACH network. Your |
| system, you can even track the funds and receive | | | | customer’s bank account shows a pending debit |
| “Not Sufficient Funds (NSF)” notifications days | | | | within about 24 hours, and your account is credited |
| earlier than with manual processing.. And in the addition | | | | with the funds in about 72 hours. |
| to receiving funds faster, preventative measures such | | | | If your business is looking for a faster, inexpensive |
| as check verification can be set up to check the | | | | way to collect payments that also offers customers |
| balance of an account before initiating a debit, which | | | | more convenience, eCheck payment processing is the |
| cuts the number of NSF fees a business incurs. | | | | simple, secure solution. |
| Consumer Benefits: | | | | This article is brought to you by PaySimple, a leading |
| Consumers also benefit from the convenient payment | | | | provider of echeck and ACH payment processing |
| options that can be offered with echeck processing. | | | | services. |
| For businesses offering the service, a consumer can | | | | |