Understanding How eChecks Work

By Payliance | 04/24/19

The easiest way to think of an eCheck is that it’s just like a paper check – without the paper. An eCheck is a promise of payment, authorizing a merchant to draw money from the customer’s bank account, either on a one-time or recurring basis. However, because eCheck transactions are conducted electronically, funds are debited and transactions are settled much faster than with paper checks.

How Do eChecks Work?

A business with an Automated Clearing House (ACH) merchant account can draw money from a customer’s bank account directly,  avoiding network dues and fees associated with debit and credit card networks. Transactions are routed through the ACH network, which provides the infrastructure for electronic transactions in the U.S.

Avoiding debit and credit card networks make eChecks a lower-cost option versus other forms of payment. eChecks are not only less expensive than other forms of payment, but they are also easy, convenient, fast and secure. Regularly scheduled payments, such as rent or mortgage payments, membership fees, or loan repayments are often set up via eCheck due to this ease and convenience. eCheck’s reduce the administrative burden of initiating new transactions for recurring payments while improving customer satisfaction.

To conduct an eCheck transaction, the merchant requests authorization for payment from the customer and then initiates the transaction on the ACH network. Funds are transferred directly from the customer’s bank account to the merchant account.


Processing eChecks With a Payment Processing Partner

Merchants can choose to partner with a third party provider of electronic payment services, like Payliance, to ease implementation and streamline processes. With a payment processing partner, eCheck processes and data can be easily integrated with existing accepted forms of payment to begin quickly accepting eChecks.

Selecting the right electronic payment processing partner can provide many benefits to an organization:

  • Payment processing partners batch and send eChecks as a group to streamline processes and ensure funds are collected and disbursed quickly.
  • Simple to use APIs and online reporting tools help integrate eCheck payment data with other business systems to create an accurate, comprehensive overview of the financial status of the organization.
  • Payment processing partners provide additional layers of security to ensure bank accounts are valid and reduce fraud.

Payliance’s eCheck Processing Solutions

Payliance’s eCheck processing solutions allow merchants and lenders to accept eChecks across any payment channel you choose while minimizing processing costs. Our late cut-off times ensure funds are collected the next day to improve cash flows.

With an easy-to-use and intuitive dashboard with real-time cloud reporting, businesses can gain greater visibility and track every transaction, with accurate, updated data for making the best decisions at every moment.

Payliance’s advanced fraud protection and prevention also help to ensure that every transaction is secure, preventing any unwanted access to customer or merchant data as well as reducing fraudulent activities.


To learn more about eChecks and how you can increase your cash flow while creating a convenient transaction experience, set up a consultation with one of our eCheck experts today.