PaperSave, Webiplex Docupeak, and Paramount Workplace are now part of PairSoft

eCheck Payments: Why They’re Essential Now and Moving Forward

Salim Khalife August 24, 2022

Person looking at payment analytics on laptop
AP Automation
Blog
In today’s digital world, eCheck payments are becoming increasingly popular as a form of digital payment. But what exactly are they? Why are they so essential now and moving forward?

In this post, we’ll explore the basics of electronic checks and outline some benefits they offer to both large and small businesses and consumers. We’ll also discuss how electronic checks will likely evolve, making them even more indispensable for online transactions. So if you’re curious about this leading payment method, keep reading!

What are Electronic Check Payments, and How Do They Work?

Electronic checks (eChecks) are electronic payments that allow you to send money directly from your bank account to another person or business. eChecks work similarly to regular paper checks, but they’re processed electronically, making payment processing much faster.

There are several ways to process an eCheck, but the most common is through the Automated Clearing House (ACH) network. To make an eCheck payment, the payer provides their bank routing number, account number, and payment amount.

The payee’s bank will verify the information and initiate an electronic fund transfer. eChecks are often used for recurring payments, such as subscriptions or monthly bills into merchant accounts.

If you are using Enterprise Resource Planning (ERP) software to automate your accounts payable processes, you can easily set up ACH payments. When you create an invoice in your ERP, you will enter the payment information for the recipient.

The ERP system will generate an eCheck payment and send it to the recipient’s bank. The funds will then be transferred from your bank account to the recipient’s bank account.

The Benefits of eCheck Payments

Reduced Costs

eChecks offer businesses a simple way to reduce payment processing fees. When traditional paper checks are processed, companies must pay for the cost of printing, postage, and staff time to enter data into their accounting software manually.

Increased Efficiency

Writing and processing paper checks can be time-consuming, especially if a company pays multiple suppliers. Using eCheck payments can help financial institutions streamline financial operations and improve overall efficiency.

High Level of Security

eChecks offer a high level of security with features like authentication, encryption, and duplicate detection. Compared to traditional paper checks, eChecks are much more challenging to alter or duplicate fraudulently. That’s because eChecks are digital documents electronically signed and certified with a unique certificate authority.

Improved Cash Flow Management

Electronic checks help improve cash flow management by assisting businesses to ensure they have the funds available when needed, without having to wait for traditional paper checks to clear.

Greater Flexibility

eChecks can be used to pay bills electronically or to make person-to-person payments. They can also be set up for checking accounts and recurring payments, making it easy to pay bills on time each month without forgetting to write a check.

Therefore, many companies are embracing electronic checks as a trustworthy alternative payment option, given their many advantages. Accepting eChecks only makes sense given their high levels of security, practicality, and affordability.

Why Electronic Check Payments are Essential Now and Moving Forward

The COVID-19 pandemic has forced businesses of all sizes to re-evaluate how they operate. One of the most critical changes enterprises have is how they process payments.

In the past, many businesses relied on paper checks to pay their suppliers. However, with so many people now working remotely, mailing checks is no longer a viable option. This has led businesses to look for alternative payment methods that are more efficient and secure.

Looking ahead, it is clear that eCheck payments are here to stay. Businesses that have not yet switched to eChecks will need to do so to remain competitive.

Consumers are becoming increasingly accustomed to paying with eChecks, and businesses that don’t offer this option will find themselves at a disadvantage.

Tips for Making the Most of eCheck Payments

If you’re new to eCheck payments, here are a few tips to help you get started:

  • Choose a payment processor that offers fraud protection. Payment processors handle debit or credit cards and payment options for businesses.
  • Get authorization from the payer before you process an eCheck. This can be done by sending an invoice through a billing system or using a paperless authorization form.
  • Use encryption. When you process an eCheck, you’ll need to include the payer’s bank routing and account numbers. To protect this sensitive information, it’s important to use encryption when storing or transmitting it.
  • Several regulations apply to eCheck payments, including the Check 21 Act and the Electronic Funds Transfer Act.
  • Keep an eye on your account activity and watch for unauthorized transactions. Contact your bank or credit card issuer immediately if you notice any suspicious activity.

By following these eCheck transaction tips, you can effectively make the most of eCheck payments and ACH direct deposit.

FAQs

How long does it take for an eCheck payment to process?

The processing time for an eCheck payment is typically 1-2 business days, but it can take up to 5 business days for the funds to be transferred.

Can small businesses use eChecks?

Yes, eChecks can be used by large and small businesses. If you’re a small business owner, you may find that eChecks are a convenient and cost-effective way to process payments.

What do I need to process eChecks?

To process eChecks within your ERP, you will need payment processing software, the payer’s bank account number and routing number, and your bank routing number and account number.

Electronic check payments are essential for conducting business in the 21st century. They are secure, efficient, and contribute to your client’s data safety.

It’s crucial to have a payment system that can keep up with the demands of the digital age as more and more businesses move and accept payments online, which is why PairSoft offers B2B payments directly integrated within the top ERPs. Get a demo today.

Salim Khalife

Salim Khalife founded Paramount Workplace, now a subsidiary of PairSoft. He currently uses his decades of SaaS experience in the consulting space and is based out of Michigan with his family.

View all posts by Salim Khalife
Graphic for Tanushree and PairSoft
People of PairSoft
Blog

People of PairSoft: Tanushree Chatwani

Woman paying with credit card
AP Automation
Blog

Everything You Need to Know About B2B Payments: Accounts Payable, Procure-to-Pay, and More

Lightbulb with lit filament
AP Automation
Blog

Solving Scaling Challenges with Procure-to-Pay Automation

Simple solutions. Powerful results. Seamlessly integrated.

Get a PairSoft Demo