Merchant Account Pricing

Electronic check services are yet another way to provide payment options for ecommerce customers. Electronic checks give customers a way to utilize their checking accounts without mailing checks through the mail. For the merchant, you reduce the paper storage problems, you eliminate the trips to the bank to deposit funds received by check or money order, and you find out immediately if the check you’ve been given is collectible.

An electronic check allows the customer to enter a bank routing number and checking account number on your secure website in the same way that a credit or debit card could be utilized. The customer specifies the check information, signer on the checking account, billing address on the account, amount and check number.

The address verification system is activated in the same way as that for the credit card, by checking the numeric part of the street address and the zip code of the customer. The address verification system is one additional security measure which the merchant can take to protect himself from fraudulent use of the customer’s checking account.

Once the electronic check is verified, the online merchant can proceed with shipping the product. Funds will usually be in the merchant’s account within two to four days.

When a paper check is presented to a retail merchant, electronic check services can be utilized to convert the paper check to electronic, thereby verifying that funds exist in the checking account provided by the customer before they leave the store with the merchandise.

The merchant is able to receive funds for the sales transactions much faster than waiting for ACH transactions to finalize through the normal channels. More and more businesses are reducing or eliminating paper checks completely and going to the electronic version.

The use of the SSL means information is secure to transmit via the internet. Usually merchant service providers are adding the processing of electronic checks to their list of services and making it an option for merchants to purchase. Some providers also provide collection services for electronic checks that for some reason were authorized and then were found to be NSF checks.

Regulations which allow banks to transmit electronic data rather than paper checks paved the way for the move to electronic check processing by merchants and vendors.

The major benefits for merchants are in reducing the number of bad checks or NSF checks and the reduced waiting time before funds from payments by check can be released. For the customers, electronic checks offer an additional easy payment option when shopping for ecommerce items. They know their transaction has cleared once it is verified, so there is no question of a check being lost in the mail and the risk of a check being sent to the wrong account is minimal.

Granted, there will probably never be a completely paperless society, but any reduction in the costs of preparing, utilizing, storing and disposing of outdated checks is beneficial. Electronic transfer of the information contained on checks is not only fast, inexpensive and secure; it reduces the number of times key data is handled.