The paper check is still alive and well in our economy and many customers prefer to use it as a means of currency. But alas, many businesses are besieged with the standard customer declaration that the "check is in the mail" yet, on too many occasions, never receive their entitled funds. Processing or accepting electronic checks ensures the customer's intention of paying for the product or service, and begins the process of moving money from the customer's account into your account.
While there are always security risks associated with transferring funds, it appears that online e-check processing does not engender any more risk than accepting credit cards in cyberspace. Certain information about the customer is required, as well as the bank routing number and account number, but such info is encrypted, using the latest 128-bit Secure Socket Layer (SSL) technology for secure Internet Protocol (IP) transactions. Indeed, while I'm aware of a number of credit card data breach incidents, I don't recall one where hackers gained access to customers' bank accounts on a massive scale as a result of an e-check payment service. Indeed, the Automated Clearing House (ACH) network that facilitates e-check funds transfer is one of the most secure transmission mediums in the world.
Moreover, there are potential customers who may not have credit cards or are even maxed out on their cards. If you accept electronic checks, these customers may then have the means of purchasing your goods. You do not want to lose potential sales because your cannot accommodate your customers' payment options or preferences.
Accepting e-checks is also relatively fast -- and certainly much faster than waiting for the delayed check in the mail. It takes about 3-5 business days to receive funds from an electronic check transfer. You may opt to delay shipping, however, until you know that the funds clear (knowledge that may typically be gained within the first 48 hours after batching).
Many business folks decide to simultaneously accept electronic checks and credit cards to cover all bases. As an added bonus, you can perform recurring or automated billing with either or both options.
Aware of the advantages of online electronic check acceptance. please note that setting up a system to process or accept electronic checks is rather straightforward and intuitive. Once you application is accepted by a payment processor, you will be entitled to an online gateway and a virtual terminal. Your online gateway may be connected to your site's order page or shopping cart so that your customers can go online and input their own payment information. The virtual terminal enables you or a member of your staff to input the customer's payment info when you receive it by phone, fax, email, or mail. The virtual terminal is a simple Internet-net based interface that contains self-explanatory fields that you fill out on behalf of the customer (such as routing number, account number, etc.).
The primary concern associated with e-check acceptance revolves around the possibility that the customer does not have ample funds in his/her account to cover the cost. Here, it's worthwhile investigating verification services (e.g., finding out whether the customer has positive funds in his/her account or whether the customer is listed on a negative database of bad check writers). There's nothing foolproof to ensure the successful transfer of funds (save for a check guarantee program that's often costly or difficult to find. However, employing verification tools should help to weed out most of the problematic transactions.
All in all, when looking at the advantages and disadvantages, it is advisable for merchants to at least explore accepting electronic checks. Many may determine that, indeed, it is best to accept electronic checks.
