Electronic check, or eChecks—also referred to as electronic check conversions, or back-office conversions (BOCs)—are secure digital versions of paper checks. Using eChecks in your small business saves time and money, as well as providing additional protection against fraud.
With eChecks, you can reduce your payment processing costs by up to 60% and receive payments faster—usually within a day. Best of all, eChecks have gained popularity with consumers, who pay $500 million in bills via the Federal Reserve Bank’s Automated Clearing House (ACH) Network, according to ElectronicPayments.org.
With eChecks, your customers pay you for goods and services in one of two ways:
- Entering their bank account information on your website.
- Writing a paper check, which you scan in to virtual terminal provided by your merchant service provider.
In both cases, the ACH Network transfers funds from the customer’s account and deposits them into yours. The ACH Network is a highly reliable and efficient nationwide electronic network governed by the National Automated Clearing House Association (NACHA) and the Federal Reserve.
When you scan a check, the system will verify the account has the necessary funds. The virtual terminal will print a receipt for the customer to sign and keep. You void the paper check and return it to the customer. You’ll be able to view and report on your merchant transactions online (features may vary depending on your merchant service provider or your payment processing solution provider).
In addition to eChecks helping merchants go paperless, the ACH Network also handles debit-card transactions, direct deposits of payroll, Social Security, direct debit payments, b2b payments, and other government benefits.
More eCheck benefits
Besides saving you time and money and combating fraud, accepting eChecks can help increase sales. You can take paper checks, convert them into eChecks, and start accepting international and out-of-state payments while using account validation and customer authentication processes to protect your business from fraud.eChecks conversion is easy to set up. And they help reduce the more than 67.4 million gallons of fuel used and 3.6 million tons of greenhouse gas emissions created by transporting paper checks.
Payment peace of mind
Electronic check conversion is one of the most secure payment methods in the electronic payment processing industry because it uses the latest information protection features, including:
- Authentication via digital signatures and public key cryptography.
- Duplicate detection thanks to software and operational controls used by financial institutions to prevent and detect duplication of scanned electronic representations of customer checks.
- Encryption used by the ACH Network, which automatically encrypts messages using 128-bit encryption and secure sockets layer (SSL) protocol.
This article originally appeared on the QuickBooks Resource Center and was syndicated by MediaFeed.org.
Featured Image Credit: DepositPhotos.com.
