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You may have heard about the latest innovation in the world of electronic payments but do you really understand how they work and how they can benefit your business?
To answer these questions and provide a more in-depth look at eChecks and the electronic-payment space as a whole, Deluxe recently hosted a webinar featuring Chris Clausen, the company’s Director of Payments & Transactional Solutions.
His presentation, eChecks: The New Way to Pay Your Business Bills, made a number of interesting points regarding how eChecks provide businesses new opportunities for efficiency and cost savings, and how they offer capabilities other forms of electronic payments can’t match.
Here is a brief look at some of what was discussed and the questions answered:
What is an eCheck?
The first thing to remember about an eCheck is that it’s still a check. There is a physical version of a check that is created, but the recipient does so on their printer. Instead of emailing a check, a link is sent via email that allows the recipient to retrieve the check and print it.
The eCheck that is printed has the same elements as a paper check: routing number, account number, signature, amount, payee, check number, etc. As with a paper check, an eCheck requires authorization but, instead of a signature, a pop-up box is used as the authorizing action.
What are the benefits of an eCheck?
Businesses like paper checks and continue to use them as a preferred method of handling transactions. eChecks are not an attempt to replace paper checks, but they do add to the benefits paper checks already offer and provide value that businesses may not realize they can now enjoy.
Paper checks are convenient, they’re secure, payers don’t need information from the payee and they include remittance data. These elements are all present in an eCheck, but eChecks bring even more additional value.
How? They save time and money.
The cost of a paper check is not just the check itself. It’s the envelope, it’s the postage, it’s the time it takes to stuff the envelope. In terms of the amount of time saved, filling out an eCheck is roughly 70 percent faster than a paper check. For a business that writes checks in batches, this time saved increases exponentially because eChecks are compatible with accounting software and integrate seamlessly with it. You can export information directly from programs such as Quickbooks and use it to make payments in batches.
How do eChecks compare with other electronic payments?
A number of differences exist between eChecks and the other electronic payment methods in the marketplace. One of the most significant is that eChecks allow remittance information to be attached. Many other electronic payments are designed for consumer use, but businesses want to be able to share what they are paying for. An eCheck can include invoice information, info about goods and services and details about the products that were purchased.
A couple more key differences include:
– Recipients of eChecks do not have to create an account or share any information in order to cash them. They need only to print and deposit them as they normally would.
– Payment is immediate. It can be made from anywhere at any time. Other forms of electronic payment have delays ranging from 24 hours to one week. With the timestamp function on an eCheck, you can determine exactly when a payment is issued.