As the use of debit, credit, and ACH payments continue to rise, eChecks are also  gaining traction as another alternative form of payment. With eChecks, merchants are able to utilize the ACH network to remove funds for their products and services directly from their customer’s banking account, all with the help of a payment processing provider. 

There are many benefits to using eChecks. One of which is that they take considerably less time to process. eChecks can also draw in a new customer base that is not too keen on using credit cards for their purchases. Cash flow goes largely interrupted as payments are not stunted by expired credit cards.

Why Using eChecks Makes Perfect Sense For Your Business

We have only skimmed the surface in exploring the advantages of using eChecks. Now let’s look into why adopting eChecks as a payment method for your business makes perfect sense. Here are the 10 reasons:

1. Reduced Cost

All businesses are concerned about keeping their operating costs low while growing and increasing their revenue streams. eCheck transactions are especially beneficial for high-risk merchants since there is no interchange involved. This saves money by reducing the cost of generating sales.

2.  Lower Restrictions

High-risk merchants typically have a considerable amount of restrictions placed upon them by their credit card merchant account. Some of these restrictions include placing a limit on the size of their transactions, as well as limitations on the amount that can be processed on a monthly basis.

However, an eCheck account has fewer restrictions, enabling merchants to conduct transactions freely and without limitations. 

3.  Increased Rates Of Approval

High-risk merchants face an incredible amount of challenges in order to acquire a high-risk merchant account. Fortunately, eChecks don’t have nearly as many restrictions on chargebacks inherent to credit card merchant accounts.

Additionally, by using eChecks as an alternative payment method, you are protecting your credit card processing account. 

4.  More Convenient

The key to adopting the right payment method for your business is choosing one that is convenient for all parties involved. Since there are fewer limits on the amount of the transaction, eChecks are great for larger ticket goods and services.

eChecks are also an easy transition for paper check users looking for a more secure and digital form of payment. 

5.  Easy To Integrate

Another benefit to using eChecks is just how easy it is to integrate them into most of the existing sales and accounting infrastructures. As soon as customers are enabled to pay via eChecks, the payments can be easily documented in your system.

6.  Physical Checks Increasingly Unnecessary

With the steady and growing popularity of digital transactions, it is expected that many traditional forms of payment will take a less prominent role. Between 2012 and 2016, the number of paper check payments dropped by close to 2.5 billion and continues to drop today.

7.  Use Of ACH Increasing

Between 2000 and 2012, the use of ACH increased from 11 to 18 percent. According to NACHA ( National Automated Clearing House Association), ACH payments reached well over $25 billion in transactions and a total of $43 trillion in value back in 2016. Compared to 2015, that was an increase of 5.1 percent.

As the ACH Network continues to evolve technologically and with increased flexibility, the growth is not expected to slow down anytime soon. 

8.  Secure

Merchants can rest assured that eChecks are one of the most secure payment methods out there. With state-of-the-art technology such as encryption and tokenization, these two pack a power punch to mitigate incidences of both fraud and data theft.

There are a total of five security components that are found in eCheck transactions: 

• Authentication: This is where the payment provider validates the consumer submitting their bank account information. This eradicates any attempts for fraudulent information to be submitted to the merchant. 
• Encryption: This is essentially a process where sensitive payment information is “masked”, translating it into non-sensitive information. By doing this, the once-sensitive information becomes useless if it were to be compromised or stolen.

All ACH transactions and eChecks are required to have encryption as they are usually processed over unsecured electronic networks. 

• Public Key Cryptography: As part of the encryption process, this is used for the process of “ciphering” (an algorithm used for encrypting and decrypting data), information to safeguard it during transit. 
• Digital Signature: This is an encryption process that uses time stamps to make sure eCheck transactions cannot be duplicated fraudulently. 
• Certificate Authorities: Certificate Authorities are the ones that provide Digital Certificates like the SSL Certificate to protect data, encrypt all transactions, and allow secure communication. 
• Duplicate Detection: This fraud detection tactic looks out for duplicate eCheck transactions and any suspicious activity. 

Merchants benefit in that they will not get hit with a fraudulent payment, thereby avoiding chargeback fees. Customers can pay with confidence as their payment information remains untouched and therefore secure.

9.  Increased Cash Flow

eCheck payments allow businesses to experience uninterrupted cash flow since checking account numbers rarely change, whereas credit card numbers can. This greatly reduces incidences of any “payment breakage”.

Most businesses can accept eChecks as a form of payment, however, there are a few businesses that are more likely benefit due to eChecks’ features:

• Subscription-based businesses – eChecks make recurring payments, autopay, and auto-renewal a snap, offering convenience for both merchants and customers. 
• Online businesses – An efficient sales model that currently exists involves the selling of a product once, then continuing to collect funds monthly, sometimes even for years after. This model has exploded in the last few years. 
• Businesses That Process Large Payments – If your business processes payments that are valued in the hundreds or thousands of dollars, you can save a considerable amount of money by accepting eChecks. This is because you are eliminating the middleman involved in processing credit card payments. Businesses thereby save by avoiding interchange fees.

10.  Great For The Environment

The transport of paper checks requires 67.4 million gallons of fuel and 3.6 million tons of greenhouse gas emissions. Using eChecks greatly reduces this problem. As care, concern, and awareness for the environment continues to grow, eco-friendly solutions are always a welcome trait for businesses.

Final Words

So should you integrate the use of eChecks for your business? That largely depends on the type of business you operate. Although most businesses will fare well in adopting this payment method, there are those that will see the benefits quicker and over a longer period of time. 

One thing is certain, by accepting eChecks, you are positioning your business to draw in a new customer base. Having a multitude of payment methods available for your customers is never a bad thing. In fact, this new payment method could translate to a whole new revenue potential.