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Accepting Checks |
Cash still accounts for the vast majority of all purchases. However, paper checks are a close second. Even in an age of electronic banking and online commerce, the paper check accounts for nearly 75 percent of all non-cash transactions in American business today.
Offline check acceptance only requires that you are willing to accept the check. Many online businesses already offer credit card payment options, but are finding that many of their customers prefer to write checks rather than use a credit card for their purchases. The benefit for your customers is that they have a viable payment option they are familiar with.
What are Electronic Checks?
Electronic checks are a payment instrument combining the security, speed and
processing efficiencies of all-electronic transactions with the familiar
and well-developed legal infrastructure and business processes associated
with paper checks.
An Electronic Check is the electronic version or representation of a paper check that:
- Contains the same information as paper checks contain.
- Is based on the same rich legal framework as paper checks.
- Can be linked with unlimited information and 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
. - Is based on check law and account agreements include provisions for electronic check transactions.
How do electronic checks work?
Electronic checks work basically the same way as a paper check because:
- 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 Secure?
Yes, they are secure. Electronic Checks Security is based on strong digital
signatures using digital certificates, authentication, public key cryptography,
certificate authorities, duplicate detection and encryption as well as being
based secure hardware tokens such as smart cards.
How Do You Start Accepting Electronic Checks?
Many merchant account providers also can provide the ability to accept electronic
checks. They usually charge additional fees for this service. Transaction
fees, discount rate, setup fees are separate and usually different for electronic
check processing. (Click
Here to learn more about merchant accounts.)
You definitely need to decide how many electronic checks you are likely to be getting each month so you can shop around to get the best rates for processing electronic checks.
All of the merchant account providers to US and Canadian businesses ecommerce-reference-desk has reviewed allow a merchant to accept electronic checks and all but one of the alternative payment companies allow electronic checks