Accepting Electronic Checks

Even in this electronic age, most purchase made in brick and mortar stores are made with cash. However, paper checks are a close second. Paper checks still account for almost 60% of all non-cash transactions in American business today.

Almost all online businesses accept credit cards but are discovering that many of their potential customers want to write checks instead. The use of debit cards instead of checks is increasing but most people still think of it as using a credit card. As a result, many online businesses also accept electronic checks.

Electronic Checks

Electronic checks combine the security, speed and processing efficiencies of all-electronic transactions with the well-developed legal infrastructure and business processes associated with paper checks.

Electronic Checks are the electronic representations of a paper check that:

• Contains the same information as a paper check
• Is based on the same well established legal framework
• Can be exchanged directly between parties.
• Can be used in any and all remote transactions where paper checks are used today.
• Enhances the functions and features provided by bank checking accounts.
• Expands on the usefulness of paper checks by providing value-added information.
• Contains all the traditional checking features such as stop payments and easy reconciliation.
• Provides consumers the protections and rights from Regulation E, which limits liability and establishes dispute resolution time frames

How do electronic checks work?

• The customer writes the electronic check and submits it to the merchant. (usually by entering information in a form on a secure web site)
• The merchant deposits the Electronic Check in his business account and receives credit
• The customer's bank validates the Electronic Check bank
• The customer's bank validates the Electronic Check and then charges the customer's account for the check.

Are Electronic Checks Safe?
Electronic Checks Security is based on strong digital signatures using digital certificates, authentication, public key cryptography, certificate authorities, duplicate detection and encryption.

How Do You Start Accepting Electronic Checks?

Most merchant account providers will provide the ability to accept electronic checks for an additional fee. The transaction, setup and discount fees are different for electronic checks so you need to take to your merchant account provider for more information.