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Guide to eChecks

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedFeb 20222 min read

Keeping your customers satisfied is one of the most important parts of any business – happy customers are much more likely to return, and repeat customers are crucial to keeping your revenues high. In order to improve the customer experience, there are a number of things that you can do, including offering their preferred payment methods. If a customer sees a payment method that they are familiar with, they are much more likely to continue with their purchase.

Some of your customers may have asked if it is possible to pay with eCheck. If you’re looking to understand what this means and how you can accept these payments, then keep reading to find out more.

What is an eCheck?

Those that are unfamiliar with the term may find themselves asking “what is an eCheck?” Well, this is a new technology that is essentially an electronic version of traditional cheques. If you pay with eCheck, then the funds are electronically withdrawn from your account and transferred over to the payee’s checking account via a network known as the ACH network, so they are therefore also known as ACH payments.

How do eChecks work?

Paying by eCheck is a relatively simple process that mirrors the process for traditional cheques. The person paying provides exactly the same information that is found on a paper cheque and then authorises the transaction. The steps are as follows:

The customer should authorise the amount that will be withdrawn from their account. The business may need to request this via an online payment form or with a recorded phone conversation.
The business will then use online payment processing software to process the information and submit the request for an ACH transaction.
The final stage of paying by eCheck is when the payment is automatically withdrawn from the customer’s account and deposited in the business account. This usually occurs around three to five days after the transaction is initiated.

What are the benefits of eCheck payments?

You might be wondering why you should accept eCheck payments when it may seem simpler to just take payments by debit card or bank transfer. Well, there are several advantages to eChecks:

eChecks are easy to use, especially when it comes to recurring transactions. Once they are set up, eChecks are processed automatically and require little work on your part. What’s more, they can also create a digital transaction log that can feed directly into your accounting system for easy bookkeeping.
Since they involve advanced encryption technology, eCheck payments are incredibly secure. Unlike traditional cheques which can pass through many hands, account information is difficult to decode from eChecks.
eChecks are very cost effective. They incur much lower fees than other payment methods such as credit cards, which can charge between 1.5-3.5% of the total transaction cost.

Despite these advantages, there are also some drawbacks to allowing customers to pay with eCheck. Firstly, the processing time is relatively slow, and you could have to wait up to five business days to receive funds in your account. What’s more, it may be an unfamiliar payment method for customers, which might make it difficult to transition.

How can I accept eChecks?

If you’ve decided that your business should accept eChecks, then there are a few simple steps that you should follow.

First of all, you’ll need to make sure that you have a merchant account with an ACH provider. This allows you to use the ACH network to accept payments by eCheck. Once you’ve done this, you then need to get authorisation and payment details from the customer by either a digital signature or through a phone call. You can then input this into your payment processing software, asking your ACH provider for support if you run into any problems.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.