Electronic Check Payments-Automated Clearing House (ACH) payments
Electronic check (e-check) is another alternative online payment method used by many businesses. Usually if you have done some purchasing over internet, e-check is offered in some sites as an alternative option with other major options like credit cards. Business owners can accept e-check payments either directly from their website automatically or manually through the Virtual Terminal. Customer who wishes to pay with an electronic check can select the e-check option on the merchant’s webpage and enter the requested information on bank account. The system debits the consumer’s account via Automated Clearing House (ACH) and transfers the funds to the merchants account. It also notifies the merchant if the customer’s account does not have sufficient funds to purchase an item and also invalid/incorrect account information.
Even if the merchant does not have an e-commerce enabled website, he can also use e-checks to process payments. This is done manually. Accounts information is manually entered by the business owner, customer’s approval is always recommended and the merchant must sign a separate e-check (ACH) agreement to perform this type of transaction.
Usually a transaction takes about 48 hours to clear. A merchant should wait for about five days before shipping any purchase because it takes two days to debit the customer, two days to deposit into the merchant’s account and another one day for the bank to post the transaction. Usually merchants should not use e-checks with quick downloadable items such as software and digital products.
Customers choose e-check as a payment method if they do not have any other option. This method is not very popular because of the delay, and also people do not wish to give their bank account details often.