Accepting Checks Online

All businesses require an online system of payment because of the increasingly e-commerce oriented markets today. Several methods of online payments are available, which include e-wallets, debit or credit cards, and online checks, which are progressively upstaging the popularity of credit card payments. An online check, or�e-check, is a check payment system for online markets, which is similar to actual paper checks. This method of payment bypasses the security risks of credit card transfers since an e-check only sends across check information in addition to some specific details, keeping information about the buyer's account safe and secure. Although electronic checks or e-checks are not absolutely failsafe against various kinds of security breaches, they do have some advantages over online credit card payments.

Accepting and making payments via e-checks is quite simple. It involves either of two simple payment methods. For both cases, customers complete their order and check out in a way similar to that of credit card fund transfers. The only difference is in the method the payment information is entered. According to the first way of making e-check payments, the customer enters information on a physical check in his possession, instead of the various fields of credit card number, expiration date, and verification code. The details from the check are then processed using the ACH network, and once approved, sent to the seller, who can use a printout of the check for depositing into his account. The prime focus here is on the software that is used to process check details and sends the seller a printable electronic copy of the check.

This first method involves the use of e-checks. A typical transaction does not require credit card details, but asks fpr bank routing information and the check number. From the point of view of the buyer, e-checks are only an electronic replacement check for paper checks. For the seller the deposit of the printed paper check is still required, and periodic visits to the bank are needed. There are however, services that allow outsourcing of the printing process and have the payment directly credited into the seller's bank account.

The second method eliminates the need for printable checks since in this method the check is directly cleared by the banks involved in the transaction. Here, an online gateway for the payment processing is involved, which collects the account, routing and other required information, and sends the funds through ACH network.

The payments are also dependent upon clearance of funds from the payer's bank. This is known as i-check or internet check method. The requirement of physical checks and processors is totally removed in this method of payment.

To begin acceptance of checks through the internet, a merchant has to apply to a check processing service, which provides the payment gateway software that can process the online checks through the internet. This gateway also acquires the relevant information related to bank account routing number and the check number. The gateway is also responsible for payment processing from the ACH network. The standard fees related t such a service is the set up as well as transaction charges. Check guarantees and verification, along with reserves, merit fees dependent upon the selected service.

The main advantage of online check clearance is that everyone is aware of check payment methods and making check payments as well as receiving such payments does not require much training, unlike credit card payments. A customer new to the e-commerce scene finds it simpler to type in check details than entering credit card details like CVV number and other such information. Additionally, processing fees for check payments are not as high as the processing fees involved in credit card transactions. The main disadvantage for e-check payments is that payees generally do not ship until the payer's check has been cleared and the funds credited, thus the shipping takes longer. This is not the case with credit card transfers where the payment is instantaneous. This is also the point where verification and check guarantees become important players. Service providers for e-check payment processing may provide protection to sellers against fraud as well as services for verification and check guarantee, along with the payment processing services. 

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