What is an eCheck?
Posted by Checkbook on Jun 01, 2020
eChecks (aka. Electronic Checks) are a payment tool that are used to send funds electronically.
A picture of a check is sent via email to the recipient. Funds are then withdrawn from the Originator’s Checking Account. Those funds are transferred through the ACH Network, and deposited into the Recipient’s Account.
eChecks hasten the payment process in an environmentally friendly way. They allow the facility to email a picture of a check, rather than mailing an actual physical check. If Paper Checks represent the age of dinosaurs, then eChecks are the first ice age. The modern day world runs on Digital Checks due to a number of flaws of eChecks.
- eChecks don’t always update in real time and funds received through an eCheck take more than 3 business days to settle.
- eChecks can’t verify the amount of funds in a payor’s account, making the eCheck more likely to be bounced when an overdraft occurs.
- eChecks require senders to find their Routing and Account Numbers, which is inconvenient, and often impossible.
- eChecks put senders’ sensitive information at risk by exposing them to the payee.
- eChecks only convert the check information into ACH files, which slows down the process for all parties involved.
- eChecks make it impossible to instantly verify bank accounts and thereby prevent fraud.
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Some Digital Payment Innovators Still See Value In Checks
Kate Fitzgerald of PaymentsSource writes "Checkbook.io also leans heavily on paper check nomenclature and imagery, sending B2C payments via a text or email that opens to look like a check made out to the recipient."
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Meet Checkbook: A Digital Check Service That Aims to Put End to Paper Checks
Checkbook’s Digital Check solution gives Financial Institutions, control of their payment process. Checkbook’s benefits become increasingly goodbye in its ability to cost-effectively enable businesses to send and receive payments in bulk and track everything in real-time online.