As the business scene becomes even more dynamic, merchants have also become more aggressive in trying to secure a bigger chunk of the customer pie to get ahead of their main competitors. It is now imperative to explore all possible means to accept payments other than credit cards and improve cash flow. As part of their business services, merchant services companies are now including accepting and processing eChecks.
As we previously discussed in one of our previous blogs, e Check is a mode of payment that relies on the ACH network to process payments. With e Check, money is withdrawn from the payer’s checking account, transferred over to the ACH network, and then deposited into the merchant’s checking account.
Compared to credit card processing, e Check uses the ACH network to transfer funds instead of the usual credit card networks. In effect, it eliminates a number of transaction fees, including Interchange. Instead, it has e Check acceptance fees that can get as low as $0.10 per transaction. This is reason enough to have this included in your merchant services.
What are the other benefits of eChecks for merchants?
- They expand the merchants’ customer reach. Since eChecks also operate electronically, merchants have an additional option to accept payments from remote locations. These payments can also be processed faster than a traditional check, especially in terms of clearing time, which makes cash flow faster as well.
- eChecks are a better option with subscription-based businesses that require recurring payments. The beauty of e Check processing is that it allows you to utilize the convenience of an ACH network, which allows recurring auto-drafts. Once customers provide their account and routing numbers and authorize merchants to take payments by e Check, merchants do not have to send monthly bills all the time. Having an online invoicing system will additionally help merchants offer a fully automated customer experience.
- They offer the advantages of paper checks with reduced labor costs. While traditional checks are good payment options, what makes merchants shy away from totally accepting them is the amount of labor spent processing it, which also means that money is going out from their pockets. But with eChecks, these manual processes are eliminated, which helps merchants incur more potential savings. By setting up your customers with eChecks, you also reduce the amount of times they needed to interact with their monthly bills, making their experience more convenient.
- Trips to the banks are no longer required. Not all customers can pay by cash or card, and having checks as an additional option will win merchants many points for better customer service. What’s even better is that merchants do not have to take the check to the banks: with eChecks, they can just send the clients’ account and routing numbers to the banks electronically, taking all the hassle of a traditional paper check away.
- They offer increased security. Traditional paper checks can be tampered with, which makes them more prone to fraud. With eChecks, this possible risk is avoided since eChecks use a variety of digital measures like the AVS (Address Verification System) and CVV (Card Verification Value) to ensure customer and merchant safety. Additionally, eChecks are tied to actual bank accounts so funds are also protected by several banking regulations should something possibly go wrong, making them often safer and more secure than traditional credit card transactions.
How can merchants support and accept eChecks?
For merchants to be able to accept e Check payments, what they first need is the clients’ bank routing and checking account numbers. This can be easily obtained by phone or in person. Merchants can also get it online through the secure form page on their websites.
Once this information is acquired, the merchants’ bank can now communicate directly with the clients’ bank to verify the funds. Once this happens, the direct transfer of funds can now happen via the ACH network.
However, this can only be possible if merchants already have the system set up that will allow them to accept eChecks as payments. To be able to do this, they will need an eCheck-processing payment gateway and a financial institution that can facilitate eCheck transactions.
The better option would be to work with a merchant services provider that can do this all for a negotiable rate.
What to look for in choosing an e Check services provider
With so many e Check providers in the market, choosing the best fit for your business may be a lot more complicated. To guide you in choosing the best possible merchant services provider (MSP) for eChecks, consider these following pointers.
- They offer what you exactly need. To get ahead of the curve, many MSPs offer additional services other than eCheck processing to make their merchant accounts feel they have gotten a better deal with them. But these do not exactly mean that they provide what you really need. When choosing for a merchant services provider that fits you best, look at the hardware and software they can offer you and check if they operate the way how you want your eChecks to be accepted. Once you’ve cleared this up, then you can start looking at what other services the MSPs could offer you.
- They offer more than what you need. While it’s good to have a merchant services provider that can help you set up your eCheck processing system, it’s even better if you can choose a provider that offers all payment processing options so you do not need to deal with more than one all the time. Check if they can provide you with a package that is customizable and has other payment solutions integrated as well. With this, they can also be easily flexible when your needs change as your business grows.
- Always consider value for money. Pricing always matters, and many times, it is not the cheaper ones that can give you the kind of service that you deserve. To know that you’re not compromised, it is always best to do a background check on the merchant services provider you may want to work with.
- They offer what you exactly need. To get ahead of the curve, many MSPs offer additional services other than eCheck processing to make their merchant accounts feel they have gotten a better deal with them. But these do not exactly mean that they provide what you really need. When choosing for a merchant services provider that fits you best, look at the hardware and software they can offer you and check if they operate the way how you want your eChecks to be accepted. Once you’ve cleared this up, then you can start looking at what other services the MSPs could offer you.
Agapay, for example, can process eChecks with higher transaction amounts for a single transaction and can accept merchants who are considered high-risk. This is an added value to what you will be getting from Agapay, since this tells you that this is a company that has an existing operations system that can mitigate risks, making your investment more secure. Aside from this, the company offers a pricing model that allows it to contribute 5% of its gross profits back to community in your name, which is a pretty nifty way to give back to the community and improve your brand reputation.
While this may not directly contribute to your business’ revenue, this tells a lot about the company’s carrying capacity, the additional systems they have in place, and what else they can provide you for your investment. It also helps improve your brand reputation knowing that you have affiliated your company to a more socially responsible merchant services provider.
To learn more about Agapay, our pricing models, and how our eCheck and other payment processing services could further help you grow your business, you may reach out to any one of us here. We’d also be happy to hear from you through telephone at 800 644 3909.