With so many digital payments and the way the world is rapidly changing, it makes sense to ditch paper checks.

Traditionally, if you had a checking account you would have to write a paper check whenever you wanted to make a purchase. The check recipient would then present it to their bank to be processed and then credited in their account.This process took at least a week before it was complete. And, there were also all those other trips to the bank when you wanted to make deposits or withdraws.

Debit cards helped speed things up and reduce those trips to the bank. But, electronic checks have really stepped-up to the plate in recent years thanks to advances in technology. In fact, in some situations eChecks may be a better option than debit cards. But, for arguments sake, let’s just focus on the main reasons why it’s time to ditch paper checks for eChecks.

What are eChecks and how do they work?

Before we get ahead of ourselves, let’s briefly discuss what eChecks are exactly and how they work.

In its simplest description, eChecks are essentially electronic versions of paper checks. They work the same way in that it transfers money from your account to another through the Automated Clearing House (ACH) Network.

As explained in a previous Due post, the ACH “is a payment network that is equipped to handle the increased security features used with an eCheck.

This payment network also handles other payment methods, including debit card transactions, government benefits payments, direct debit payments, direct payroll deposits and business-to-business payments.”

“These eChecks can start out as an actual paper check that is then converted using an electronic scanner provided by a merchant services partner. An eCheck can also be considered the process of entering a bank account number and routing number into an online form to make a payment.

Either way, the funds for that payment is electronically transmitted, taking the money from your account and putting it into the person or business designated to receive it.”

That’s not complicated, right?

Hopefully you now have a basic understanding of eChecks and how they work. Now it’s time to explain why they’re far superior than paper checks.

1. eChecks are cheaper.

Did you know that issuing checks is ten times more costly to businesses than making electronic payments? That’s what multiple industry studies have found. In fact, the high cost is the main reason why almost 80 percent of businesses are moving away from paper checks.

According to one survey, businesses estimated their cost to issue a paper check ranged anywhere from $1 to $26 dollars with the average cost of $5.91 per check. However, the Aberdeen Group found the average cost of a check payment to be $7.78.

Check costs vary between businesses.

Of course, the cost to issue a check will vary between businesses. Factors like check volume, labor, check and envelopes supplies, printing, mailing preparation. If you have a lockbox service fees, postage fees, bank processing fees, check reconciliation, dealing with lost checks, vendor questions, and escheatment tracking — that adds a whole other level of costs.

Electronic checks, on the other hand, range between $0.26 and $0.50 per automatic clearing house (ACH) credit transaction and $1.50 for a purchasing card transaction. That’s because eChecks don’t require the manpower or physical supplies that come with paper checks.

2. You receive your funds lightning fast.

Businesses that accept eChecks typically have their funds deposited almost twice as fast as those processing paper checks. Thanks to same-day ACH becoming a reality starting in September 2016, makes the days of waiting for a check to a clear a concern of the past. Remember, the sooner you have money into bank account, the healthier your cash flow is.

3. More convenient.

Offering eChecks expands your customers’ payment options since they can be accepted in-store, over the phone, or online. Remember, when you provide more payment options for your customers the better chance you have to increase sales..

Here’s another convenient perk. You no longer have to drive to the bank or scan your check in order to deposit it into your account. Electronic checks are sent to your bank for you. Even better, the days of accidentally losing or misplacing a paper checks over – as well when a customer forgets to sign the back.

4. Deceases errors and fraud.

eChecks reduce the potential for errors and fraud. The reason? Fewer people are handling them.

As for fraud, merchant service providers maintain, monitor, and check files against negative account databases. These data bases store information about individuals or companies that have recorded records of fraud.

eChecks use account validation and customer authentication processes when processing international and out-of-state checks.

Electronic checks rely on the ACH Network. This network is regulated through the Federal Reserve’s Regulation E and the NACHA Operating Rules.

There’s also an encryption feature that verifies the account number, dollar amount, and even uses a digital signature to check against the name of the account.

5. Better for Mother Earth.

Finally, eChecks can reduce over 67.4 million gallons of fuel and 3.6 million tons of greenhouse gas emissions created by transporting paper checks.

Ready to get started with eChecks?

You first need to pick a well-established eCheck processing company. While good pricing is important, ultimately want to work with a reliable processor.

You also want to look for a processor that aligns your current business processes with your new electronic processing system. It should also easily export customer data and integrate with your payments and banking system.

Once you’ve found a processor, let your clients or customers know that you’re making the switch to electronic checks.

Remember the federal laws.

It’s not only a curiosity, federal laws require you to post a notification regarding this change. You must also provide customers with a phone number if they want further information.


Hi, I'm Albert. I'm a content ninja. When I'm not writing and brainstorming content ideas, this New Jersey native spends his time traveling, blasting music, and keeping his chocolate lab at bay.

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