Online payment

What is an eCheck? All About Electronic Check Payment

Making payments electronically is one of technology’s future gifts we can enjoy in the present day. In fact, most people already utilize electronic payment systems without knowing it. Gym memberships, for example, are often referred to as automated payments but really, they’re fulfilled via electronic checks. 
While eChecks are easy to use and understand, there’s a bit more to them than most companies and clients know, so, let’s take a deeper dive into what they’re all about. 

What is an Electronic Check?

If you’ve been wondering what is an eCheck, the answer has probably been at your disposal for a while. An eCheck is an online payment wherein money is taken from a payer’s account, sent to an overarching network (the ACH network) and then deposited into the payee’s checking account. 
An electronic check is just like a regular check but without the paper and pen. Like many facets of our regular lives going digital, eChecks are another example to add to the mix. 
The biggest benefit to eChecks is time; both companies and clients save generous amounts of time by using electronic checks instead of paper checks.

How do Electronic Checks Work?

An electronic check is an online check payment that must be authorized by a customer by contract signature or recorded consent. The process of issuing, confirming and cashing is pretty simple and can be broken down into four main steps:

4 Steps of How to Pay with Electronic Check 

Getting set up with electronic payments and learning how to pay with e-check formats is simple.

  • Authorize

Gain written, or recorder verbal permission for transaction.

  • Set up

Accurately input all relevant bank information and transaction details.

  • Submit

Save, submit or process transaction.

  • Transfer

Funds are sent to ACH from payer’s account and deposited into payee’s account.

How to Send an Electronic Check

Before sending an electronic check, the payee must have an ACH merchant account (more on ACH further below). From there, there are two options for electronic payment sending.
Here are the two main ways to send an eCheck:

  1. Online written consent
  2. Audio recorded consent

Online Written Consent

With online written consent, the company sends the client a form to fill out and sign. The form will include bank information (including account and routing numbers) and amount of payment. Once the client hits “submit,” the funds can be withdrawn at the agreed upon times by the company. 

Audio Recorded Consent

In this case, the company calls the client on a recorded line to get the bank information (including account and routing numbers) and payment amount. The information needs to be input into an online payment terminal and from there, the company can process the details to safely withdraw the allotted funds. 

What is an Electronic Check Processing Time?

Most payers and payees want to know are electronic checks processed immediately. EChecks can be processed quickly, depending on the provider used. 
There are a few steps involved in the process, including:

  • Verification of funds

Verifying funds takes between 24 and 48 hours (1-2 days).

  • Transaction clearance

If the funds are registered as available, clearance takes between 3-5 business days. 

  • Deposit

Once the transaction is cleared, the funds travel from the payer’s account through the ACH to the payee’s account.
Total time: 4-7 days
Processing fees are minimal
Depending on which system you use, fees will vary between per-transaction to monthly, with average costs ranging between $0.30 and $1.50 per transaction. Before you go with one system over another, account for the associated costs in your budget and goals.

What Types of Payments are Typically made with eChecks?

Electronic payments can be used to pay for a wide variety of transactions. Here are some of the most common uses:

  • Rent
  • Fitness membership
  • Monthly fees
  • Car payments
  • Mortgage
  • Legal (or related) retainers

What is the Automated Clearing House?

The Automated Clearing House (ACH) is an electronic network that financial institutions in the United States use to process payments digitally. Every eCheck transaction is sent through the ACH transfer service, where funds are verified, cleared and transferred. 

What Types of Electronic Payment Systems are There?

Electronic payment systems are not limited to eChecks. In fact, they conduct business most fluidly in a few ways, including the use of:

  • Integrated systems
  • Mobile payments
  • Web payments
  • Credit card terminal

Benefits of an eCheck Payment

Using eChecks will undoubtedly make the business less complicated. Here are just a few of the top benefits:

  • No transaction amount limit
  • Low transaction cost compared to credit cards
  • Recurring payments made easy
  • Security and tracking
  • Fast processing
  • International transactions

Who is a Candidate for Electronic Checks?

Everyone is a candidate for eChecks, but some companies are more naturally primed to benefit from them. Check out the best fits below.

  • Corporations

Corporations are obvious candidates for electronic payments, with overhead vast and varied and incoming and outgoing payments in constant need of attention. Electronic tracking, fulfillment, and filing make paying employees, paying vendors, receiving client payments and keeping track of all expenses easy and reliable. 

  • Small businesses

Big companies are not the only ones to benefit from electronic payment systems. Small businesses foster more room for growth by providing electronic payment options and onboard more potential for types of sales by including the various software programs to allow purchases from more places and for more services.

  • Miscellaneous businesses

If you do not fall into either category above or you do and you’re still wondering if eChecks are right for you, check out these characteristics that generally entail a good fit:

  • Offer payment plans
  • Accept donations on a regular basis
  • Offer multiple payment options
  • Offer subscription-based services
  • Actualize recurring sales
  • Sell expensive items

If you are a business interested in setting up an eCheck merchant account, you’ll need the following information:

  • Number of years in business
  • Federal Tax ID
  • Estimated processing volume(s)

Armed with these details, you can quickly apply online. It’s as simple as that!

Outsource Electronic Pay

Many companies opt to outsource the handling of all payments, including e-checks and electronic options. Whether you are a small business opening up doors to new possibilities or a large corporation needing to track multiple moving pieces, a professional firm can help you achieve your goals and stay on top of all checks and balances along the way.


CheckIssuing makes handling electronic expenses easy and takes care of all of your employees and business payments so that your team can focus on running a business as efficiently as possible. 
It’s never too late to start using electronic payments for employees and clients, and certainly never too early. Get in touch with our team to learn more about the services we offer and start processing your payments seamlessly, today.