What Is an eCheck: The Complete Guide to Accepting Electronic Checks


In 2020, it is rare to carry a suitcase full of cash with you – that’s because there are better methods out there. You can pay for services using your credit or debit card or transfer the funds using your online bank account.

There is also yet another option – eCheck. It is particularly important for businesses that often deal with problematic customers to accept many payment options. Accepting eChecks increases the chances that the clients will pay for your services on time.

If that’s the first time you are encountering this term, then don’t worry – we’ve got you covered! In a minute, we’ll explain what eCheck is, and why you might find it useful if you are running a company.

What Is an eCheck?

An eCheck is essentially the same thing as a regular check, with the exception that the entire process is conducted electronically. It means that neither party has to go to a bank to transfer the funds.

Instead, money is withdrawn from one account, and with the help of the ACH network, it ends up being deposited to another account. It makes the process easier, as it allows a company to withdraw funds directly from the client’s account.

However, it’s not that simple – the owner of an account that is charged has to agree to that. How? There are several ways:

Customers can agree to be charged money if they sign a contract.
In the case of companies, especially those that develop apps and software, it is common to charge customers just for setting up an account.

If you’ve ever registered on a website and later discovered that funds had been withdrawn from your account, that’s because such information is often hidden in the “Terms and Conditions” section, which many people discover way too late.

A recorded telephone conversation can also be used to prove that a customer agreed to be charged for a service.

How Does eCheck Work?

Once a customer has agreed to be charged money through one of the previously described methods, a company is authorized to withdraw money from the account. However, before they can proceed, they need a client’s account and routing numbers. Once a company is provided with this information, they can input them into a terminal.

If the transaction is successful and the funds are transferred to the company’s account, the customer receives a receipt for the payment. It takes several (usually between 3 and 5) business days for the funds to be deposited on another account.

Businesses also use eChecks for recurring payments. That’s especially often the case when customers pay a subscription fee – it wouldn’t make any sense for them to have to sign an agreement each month.

Unfortunately, it also means that if a customer forgets to cancel the subscription, they might be in for an unpleasant surprise.

Why Are eChecks Used?

One of the biggest advantages of eChecks is their convenience. Unlike with regular checks, you don’t have to physically go to the bank if you want to transfer money to another account. If you are a customer, you have to provide the necessary information, accept the terms and conditions, and voila!

Another reason why eChecks are used instead of other payment options is that the fees for businesses are lower than in the case of credit card payments. A company has to sign a contract with an online payment service provider if they want to allow their customers to pay for the products and services without leaving their home.


Because of that, an online payment service provider receives a fee for every transaction. However, not all payment methods are equal, and the amount that goes to the online payment service provider varies. That’s why companies prefer eChecks to credit card transactions – they have to pay smaller fees.


Although it’s not a rule, the fees from payments usually have a direct impact on the costs of the products and services offered by companies. Online payment service providers usually charge those who are dealing with problematic customers higher fees. As a result, they earn less money, which often has an impact on their prices.


The world of online transactions is constantly evolving. It means that certain online payment methods might become popular for a short period only to suddenly lose their popularity. It’s not because of security – even if the threat of hacker attacks exists, the online banking systems are usually among the most secure places on the internet.

However, there is a different factor that should not be underestimated – transaction fees. A huge part of the growing popularity of eChecks can be attributed to the lower fees that companies have to pay for each transaction.

In our world money is usually the deciding factor, and it is no different in this case. We hope that after reading this article, you know what eChecks are, and why they became so popular.