How to Save Time and Money with E-Checks

by Christopher Null

3 min read

Electronic check, or e-checks — also referred to as electronic check conversions, or back-office conversions (BOCs) — are essentially secure digital versions of paper checks. Using e-checks in your small business offers increased time and money savings, as well as additional protection against fraud.

With e-checks, you can reduce your payment processing costs by up to 60 percent and receive payments faster — usually within a day. Best of all, the system that processes e-checks has gained popularity with consumers, who pay $500 million in bills via the Federal Reserve Bank’s Automated Clearing House (ACH) Network, according to

With e-checks, your customers pay you for goods and services in one of two ways:

  • Entering their bank account information on your website.
  • Writing a paper check, which you scan in to virtual terminal provided by your merchant service provider.

In both cases, the information is transferred electronically over the ACH Network, which takes the funds from the customer’s account and deposits them into yours. The ACH Network is a highly reliable and efficient nationwide electronic network governed by the National Automated Clearing House Association (NACHA) and the Federal Reserve.

When you scan a check, the system will verify the account has the necessary funds. The virtual terminal will print a receipt for the customer to sign and keep. You void the paper check and return it to the customer. You’ll be able to view and report on your merchant transactions online (features may vary depending on your merchant service provider or your payment processing solution provider).

When customers provide their bank routing or checking account number to pay you electronically, you eliminate paper altogether and can easily verify and track the payment.

In addition to e-checks, the ACH Network also handles debit-card transactions, direct deposits of payroll, Social Security, and other government benefits, direct debit payments, and business-to-business payments.

Additional E-Check Benefits

Besides saving you time and money and combatting fraud, accepting e-checks can help increase sales because you can take paper checks from those who still want to pay that way. If you’re converting from paper checks to e-checks, you can start accepting international and out-of-state payments while using account validation and customer authentication processes to protect your business from fraud.

Electronic check conversion is easy to set up. And e-checks help reduce the more than 67.4 million gallons of fuel used and 3.6 million tons of greenhouse gas emissions created by transporting paper checks.

Payment Peace of Mind

Electronic check conversion is one of the most secure payment methods in the electronic payment processing industry because it uses the latest information protection features, including:

  1. Authentication via digital signatures and public key cryptography.
  2. Duplicate detection thanks to software and operational controls used by financial institutions to prevent and detect duplication of scanned electronic representations of customer checks.
  3. Encryption used by the ACH Network, which automatically encrypts messages using 128-bit encryption and secure sockets layer (SSL) protocol.

How to Get Started with E-Checks

If you’re ready to get started with electronic payments, here are some tips to ease the process:

  1. Choose a well-established processing company. Good pricing is important, but working with a reliable processor is essential.
  2. Notify your customers that your business will begin using electronic check conversion. Federal laws require you to post a notification about this change and give your customers a takeaway copy. You must also provide customers with a phone number to request more information.
  3. Look for a processor that makes it easy to align your current business processes with your new electronic processing system, export customer data, and integrate your new system with your business management software.

QuickBooks Payments offers a complete payment processing solution. Your business can take payments from customers in a variety ways — from ACH bank payments and electronic checks to credit cards including Visa, MasterCard, Discover and American Express — and payments hit your account twice as fast as before.

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