Advantages of Accepting Electronic Checks for Your Online Business
Internet-based transactions were once chiefly the province of eCommerce retail spending, but customers have become significantly more comfortable using online and mobile payments for a wide range of products and services, including paying their bills. This trend is expected to continue to increase as consumers become more accustomed to the technology. Indeed, part of this trend seems fueled by generations of “digital natives,” those who have grown up using smartphones and mobile devices for all manner of basic, everyday tasks.
In this environment, wherein mobile payments reached an estimated $130.3 billion in 2020, multiple methods of making digital payments are taking hold. While for many, paper checks have gone the way of the dinosaur, the e-Check or digital check is rising in popularity. Digital checking carries all the advantages associated with paper checks, but without the hassles and extra costs that traditional paper checking entails. Having the flexibility to accept e-Check transactions only provides advantages for both the merchant and the customer. Here are a few ways that digital check transactions can benefit your business:
1. Better Security
Digital checking is an excellent alternative for customers who are concerned about the security issues at stake using debit or credit cards online. Electronic checks use the same security methods applied to direct deposits, and are secured by encryption measures that track the value of the check and the associated account number. This helps to guarantee the accuracy of the check information. You can also opt for maintaining your own secure link to allow you to process e-Check payments efficiently.
2. Faster Processing
Processing and clearing a paper check can be a lengthy process. The check can’t be processed until it physically reaches the bank, after which point it takes time to clear, and the whole process must be tracked. For the check user, there’s the added hassle of making sure you have enough checks, and ordering and buying more checks when you run out. None of those issues arise with digital checking. Nothing needs to be tracked, there’s no waiting to clear, and there’s no running out and ordering more checks. All that needs to happen for an electronic check transaction is to verify that the account details are correct. After that, the transfer of funds is instantaneous.
3. Less Risk
With digital checking, there’s no such thing as a bounced check. If sufficient funds aren’t present in the customer’s account, the bank simply refuses to process the transaction. That means you never need to deal with bounced check fees. The instantaneous nature of e-Checking helps to guarantee that your business maintains a consistent cash flow; you won’t find yourself waiting to gain access to money that your customer has already paid. There’s no “the check’s in the mail” delay standing between you and your funds. Unlike with credit and debit transactions, which can be easily disputed by the cardholder both in cases of actual identity theft and in “friendly” fraud, e-Checks provide maximum protection against chargebacks. When you receive a digital check payment, you can feel much more secure that the funds are safely yours, and a dispute won’t result in fines or penalties from your bank.
4. Familiarity and Universality.
Digital checking relies on familiar and trusted financial infrastructure: everybody understands how checks work. A large portion of your customer base may have been writing checks for decades. Using this universal system in a fast and efficient online format gains customer trust and removes a barrier between you and the customer. The fewer barriers a customer encounters in trying to make a payment, the more successful transactions the merchant will make. Digital checking also crosses international barriers more easily than overseas credit or debit card transactions.
5. Payment Gateway Compatibility.
Electronic checking is compatible with most online shopping carts and CRM software, making it simple to integrate e-Check acceptance seamlessly into your existing business setup. Even Check 21 processing is relatively simple to incorporate into your online business.
6. Ideal for High-Risk Situations.
Many of the limitations placed on debit and credit card processing transactions do not exist with digital checks. For instance, there are no e-Check transaction limits for high ticket items. High value transactions tend to be restricted by credit card processors because of the risk for fraud, but these risks are mitigated with electronic check transactions, so there are fewer restrictions in place. This same reason makes using digital checking an excellent choice for start-up businesses, and companies working in industries that credit card processing institutions refer to as “high risk.” Rather than subject high-value transactions to the larger fees and cash reserves that “high risk” card transactions are often required to operate under, a merchant can offer digital checking for these purchases and receive payment instantly.
As the world becomes increasingly reliant on digital technology in general and our smartphones in particular, the percentage of transactions that take place entirely digitally is only going to increase. Offering customers more options to make those digital transactions has clear benefits to the merchant, as those options remove barriers to customers making payments. Digital checking is a quick and secure transaction method that has clear benefits both for the customer and for the merchant, so the ability to accept e-Checks can only save you time and money while reinforcing customer loyalty by making their purchases from you feel safe and simple.
If you want to start using electronic checks, take a look at our options for check processing.