eChecks are an efficient way to make fast and secure online payments. As paper payments continue to decline, electronic checks are emerging as a practical solution for both merchants and consumers.
While the processing times for eChecks vary, they are becoming a top choice for handling payments in the ecommerce industry.
Learn how long it takes to process an eCheck in this article.
What Is an eCheck and How Does it Work?
An eCheck is a digital version of the paper check. eChecks are used to make online payments, and the whole process goes through the ACH (Automated Clearing House) network.
Processing an eCheck starts with the payer filling out a payment form with relevant information. This includes the routing number, a nine-digit code which identifies the financial institution releasing the check, and the payer’s checking account number.
After agreeing to the terms and conditions, the customer authorizes the transaction by signing an order form, providing verbal or online confirmation. The merchant’s payment processor sends the information to the ACH network, which facilitates and oversees the transaction. In the final step, the funds are withdrawn from the payer’s account and deposited into the receiver’s (merchant’s) account.
Note: Learn everything you need to know about the safety of eChecks by referring to our article Are eChecks Safe.
How Long Do eChecks Take to Process?
eChecks are processed faster than paper checks because merchants can retrieve the customers’ information immediately through secure website pages. Customers no longer need to manually fill out paper checks and then take them to the bank.
When eChecks are processed, the payment request is first sent through the ACH network and verified by the customer’s bank. This step can take 24 to 48 hours.
After the payment request is verified, electronic checks take 3 to 5 business days to process and become visible on the merchant’s account. The merchant’s bank may also hold the money for some time to perform its own security checks, which can take up to 24 hours.
Typically, processing an eCheck takes 3 to 5 days, in some cases even up to 7 days. Processing times are delayed by weekends and bank holidays, if the payment amount is large, and if the payment is cross-border (state and national).
eChecks are processed faster than paper checks because merchants can retrieve the customers’ information immediately through secure website pages. Customers no longer need to manually fill out paper checks and then take them to the bank.
Note: For more on ACH payment processing times, refer to our article ACH Payment Processing Time – How Long Does It Take?.
Are eChecks Processed on Weekends?
No, eChecks are not processed during the weekends or holidays but only during banks’ working hours. So, if a customer gave authorization on a Friday, it would take a full week for the seller to see the funds on their business account.
Conclusion
eChecks are processed faster than paper checks, making them a popular payment method with both merchants and consumers. They are secure and particularly favorable for accepting recurring payments.
Enquire with your financial institution what it takes to start accepting eChecks, and enjoy the efficiency and low costs of receiving payments this way.