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Check Payment Processing Companies: How To Choose One

A man on a laptop researching the best check payment processing companies and how to choose one.

When most people think of checks, they think they are outdated. However, eChecks are frequently used and are alive and well. In 2021, there were 29 billion eCheck payments. If you want your business to profit from this form of payment, you will need a check payment processing company to accept eCheck payments with ease.

What Is Check Payment Processing? 

An eCheck is a kind of electronic funds transfer payment. The customer enters their banking information into a payment gateway or website. eChecks use the ACH network, and they are quicker and offer more security than a paper check.

How Do eChecks Work?

EChecks facilitate the transfer of money from one bank account to another. To do this, eChecks use an electronic network called ACH or the Automated Clearing House. The ACH connects all banks in the United States.

The eCheck process includes several steps, including: 

  • Payment Authorization: The consumer enters their bank account information and authorizes the transaction, typically through a payment gateway. This payment can be approved as a one-time or recurring payment. 
  • Payment Request: The payment processor of the business uses the customer’s information to make a payment request to the ACH.
  • Payment Confirmation: The ACH forwards the request to the customer’s bank. The bank then verifies the details of the transaction and confirms or rejects the payment based on available funds.
  • Transaction Completion: Once the purchase is verified, the money is then transferred from the customer’s account to the business account.
A person making a check payment through their smartphone to a business for goods or services.

What To Look For In A Check Payment Processing Company

When selecting a check payment processing company, look for these features:

  • Cost Savings: eChecks cost less than credit cards with lower fees. The processing rate can be a flat fee or a percentage. Certain companies may even offer free check processing if you are paying for credit card processing with them. 
  • Overall Cost: Traditional merchant processing charges around $15 to $30 a month to add check payment processing to your account. Ideally, the check payment processing companies that you look into should be able to include check processing for no additional fee.
  • Valuable Features: Check payment processing companies can help your business with features such as a website builder, recurring payment support, advanced analytical tools, expedited deposits, and more.
  • User-Friendly: Your check payment processing should be simple and easy to use. They also need to offer customer support to help with account setup or when there are any issues.
  • Security: The check payment processor should have top-notch security and encryption to keep customer information stored to prevent fraud. 

Benefits of Check Payment Processing 

There are several benefits of check payment processing and eChecks. These include: 

  1. Money Saving

EChecks eliminate the need for expensive credit card networks. Echeck fees fall between 0.5 and 1.5 percent of the transaction fee. Credit card processing fees average around 1.5 to 3.5 percent. Using eChecks can be a significant cost savings for your business.

2. Convenience

Due to the fact that Echecks are an ACH electronic payment, the funds transfer is quicker and easier than paper checks. eChecks usually take around three to five business days to process. 

3. Recurring payments

EChecks allow you to set up auto-pay for recurring payments without worrying that the information might change. Credit card numbers can change often. Echecks also eliminate network exchange fees, and it’s simple to create eCheck payments online.

4. Security

EChecks are more secure than paper checks. They have the lowest rate of fraud; on average eChecks average eight cents of fraud per $10,000. 

What Type Of Security Do EChecks Use?

EChecks have major security checkpoints, including:

  1. Authentication: Authentication is the process where the payment processing company verifies the customer submitting the account information. Authentication ensures fraudulent payment data isn’t sent to the business.
  2. Encryption: Encryption is the process of “masking” sensitive data and making it non-sensitive and, therefore, useless if it’s stolen. Encryption is required for any ACH transaction, including eChecks, that happens on an unsecured electronic network.
  3. Public Key Cryptography: Cryptography is a part of encryption that is used to cipher data and protect it while in transit. 
  4. Digital Signatures: Digital signatures with time stamps are part of the encryption process to ensure that eCheck transactions can’t be fraudulently duplicated.
  5. Certificate Authorities: Certificate Authorities issue digital certificates to protect data, encrypt transactions, and provide secure communication.
  6. Duplicate detection: Duplicate detection is a fraud strategy that checks for duplicate eCheck transactions and suspicious activity.

Businesses That Benefit From Using Check Payment Processing Companies

ECheck payment processing is one of the best payment options for businesses that offer subscription services or bill recurrently. Businesses that can benefit from using echeck processing include:

  • Legal advice companies
  • Debt collectors
  • Credit repair companies
  • Weight loss and fitness companies
  • Insurance policies
  • Phone and wireless retailers
  • Utility companies
  • Magazine subscriptions
  • Educational seminars and online courses
  • Mobile app and other software

How To Begin Accepting eCheck Payments

To begin accepting eChecks, you will need either a merchant account or a third-party check payment processing company. Next, you need a process to securely obtain your customer’s banking information which requires a payment gateway. Most payment processing companies offer the gateway with their service.

How To Get A Check Payment Processing Merchant Account For Your Business

A person filling out a paper application with a pen for a check payment processing account.

Applying for an eCheck merchant account is similar to applying for any other merchant account. Once you find a check payment processing company, you must provide information such as: 

  • A federal tax ID number or EIN
  • Copy of ID
  • The number of years you’ve been in business
  • Potential processing volume
  • Business contact information
  • Business bank account information
  • Business bank statements
  • Void check
  • Payment processing statements

The payment processing companies will review all the information to determine whether they accept the application or not. Approval can take days or a couple of weeks. 

If you want to accept eChecks on your website you will also need to review the website to verify the pages load quickly. Privacy, shipping, and return policies also need to be easy to find, along with customer service information.

Companies that don’t have a website should include some pricing information, samples of sales agreements, and marketing materials. This allows the underwriting department to become familiar with your business and the terms and conditions around transactions.

It is also a common practice for underwriting teams to conduct internet searches on a company or its owners. If your business has less than favorable reviews, it is essential to respond politely and professionally. Of course, no company has excellent reviews, but you don’t want any negative associations with your company. 

Why Do You Need Check Payment Processing?

Check payment processing companies give customers the ability to use their go-to payment method. ECheck processing also protects your business from bounced checks due to insufficient funds or closed accounts.

How Echeck Payment Processing Increases Profits

Check payment processing companies allow you to capture sales from customers that don’t have credit cards, are maxed out on their cards, or prefer to pay with their bank account. EChecks also give customers another way to pay. 

Although credit and debit cards are the most common payment methods in the United States, 30 percent of customers don’t have cards. When your business accepts eChecks, you give these customers a way to purchase from you that is easy for them.

Offering alternative payment options is one of the easiest ways to increase your profits without any additional work required. Companies that accept eCheck payments report sales to rise 10 to 30 percent by adding eChecks as a checkout option.

Final Thoughts

Check payment processing companies can provide several benefits to your business by giving your customers more flexibility in payment methods and providing more secure payment options. It also offers the customer convenience and ease of use for making payments.

Pairing your business with a check payment processing company can benefit your business with lower fees, more security, protection from bounced payments and fraud, and other useful features such as subscription payment support, expedited deposits, analytical tools, and more.

Choosing a check payment processing company wisely can help your business to accept payments quickly, keep your customer base satisfied, and secure future business.

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