There’s no denying that we live in a digital age. Among consumers today, electronic forms of payment are the preferred and most popular method. The total transaction value in digital payments is in the trillions and expected to grow bigger in the years to come.
As a small business owner, you’re no stranger to credit cards and debit cards, but do you know about eChecks? Like other forms of electronic payment, eChecks are convenient and fast. If you’re curious about electronic checks, it’s time to see what they can do for your business.
Here’s what you need to know about eChecks.
What Are Electronic Checks?
An electronic check works almost exactly like a conventional paper check. You can use the digital check for any transactions that a paper check can cover. For example, you can use an eCheck to pay for rent, mortgage, or any recurring payments.
The process of transferring funds from a payer to a payee is still the same. This means that a payer can send funds from their account to a payee’s bank account.
The difference is that there are no pens and paper involved. Everything happens electronically.
The transfer of money is processed through the Automated Clearing House or ACH. The ACH network is a centralized system that directs funds from one bank account to another. These include direct deposit, bills payment and of course, eChecks.
Why Use eChecks?
You might ask, why bother with eChecks when you could still send and receive paper checks?
Let’s talk about money first. In general, issuing an electronic check is cheaper than a paper check. The costs that come with paper checks, such as the manufacture of paper and postage requirements, are sidestepped by eChecks.
It’s estimated that an eCheck costs about a tenth of what writing a traditional check may cost. Processing eCheck payments are also less expensive than the fees to process credit card payments. This is why you’d save more money by accepting an eCheck for high-cost items.
Also, you still get all of the features of conventional checking if you choose to bill clients through eChecks. You can easily trace any eCheck issued or stop payments if you need to.
The biggest advantage of switching to eChecks is speed. Taking away the need to drop or mail a physical check saves a lot of time. If time truly is money, switching to eCheck payment is just good business sense.
What About Security?
The electronic checking system is packed full of features to detect any fraudulent activity. From the beginning of the transaction, a check acceptance service will verify if the client does, in fact, have the authority to use the account.
If the information entered doesn’t match what’s on file, the payment is declined. It will also look at the client’s banking history during verification. If something shady is discovered, it will flag the client’s account.
Other safety features include the use of digital signatures and public-key cryptography. If you include the bank’s own security measures, you’re confident that your finances are in good hands.
Ready to Give eChecks a Try?
Now that you know about electronic checks, it’s time to “cut the paper” and switch. As a convenient, fast, and secure payment method, you’d be left behind if you’re stuck on paper.
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