Paper check usage is declining—U.S. households now use checks for only 12% of bill payments on average.
Paper checks can be a hassle for you and your customers to deal with. Most customers now prefer digital payments as faster and more sustainable payment options.1 Accepting digital options like eChecks can give your business the opportunity to transition away from paper checks and capitalize on changing consumer preferences, while saving2 time, money, and effort.
What is an eCheck?
eCheck is a payment method that moves funds from a consumer’s checking account to a business’s account, replacing a paper check with an electronic payment routed through the Automated Clearing House Network (ACH). With more than 30 billion transactions processed in 2022, eChecks are a popular payment option for both businesses and consumers. They’re useful for bill payments, mail orders, telephone orders, website orders, and recurring subscriptions.
How do eChecks work?
When your customer is ready to make a purchase, they select eCheck. They provide the name on the account, dollar amount, bank routing number (i.e., bank identifier where their funds are held), and account number. The routing number is then verified to ensure the banking information is valid.
Here’s how the process works:
Joe needs to pay for his son’s dental bill. His son’s dentist, Dr. Brightsmile, emails Joe an online payment invoice for $200. Joe opens the invoice and sees he can pay with Card or eCheck.
Joe authorizes Dr. Brightsmile’s practice to pull the $200.00 from his checking account.
Dr. Brightsmile’s payment system (Authorize.net) submits the $200.00 for processing.
Once the transaction is complete, Joe receives confirmation the bill has been paid.
Authorize.net submits the $200.00 to Joe’s bank via the ACH network.
Joe’s bank pulls $200.00 from his account and sends it through the ACH network to Authorize.net.
Authorize.net deposits the $200.00 into Dr. Brightsmile’s account.
Popular uses for eChecks
eChecks can be used for both one-time purchases and for recurring payments such as utility bills, insurance, and rent.
For example, Joe enjoys working out and belongs to a gym. He pays $35.00 per month for gym dues and a yearly $100.00 membership fee. He has authorized his gym to pull funds from his bank account for these fees automatically, making it easy for him and his gym.
Although eCheck payments can happen multiple ways (e.g., in person, over the phone, on the internet), online payments have particularly seen growth. The COVID-19 pandemic accelerated this; in 2023, the number of internet-based ACH payments grew nearly 6%.3
The benefits of accepting eChecks
Businesses and their customers can benefit from a variety of cost saving and convenience factors by accepting eChecks.
Business benefits
- Save time. eChecks are processed electronically, you don’t have to wait for a paper check to arrive in the mail before receiving notice of a customer’s payment.
- Less effort. With a one-time approval to withdraw funds from a customer’s account, you no longer need to manually collect payments on a recurring basis.
- Reduced dispute rights. Customers have fewer dispute rights, and a chargeback period of just 60 days, reducing uncertainty for the business.
- Reduce errors. The process of receiving and depositing a paper check has multiple opportunities for human error, which can cost time and effort for your business.
- Reduce administrative burden. There are financial costs associated with check acceptance, including employee expenses and bank fees, which you can help eliminate by replacing paper checks with eChecks.
Customer benefits
- No paper. eChecks help eliminate the time, costs, hassle, and efforts associated with using paper checks.
- Inclusivity. Customers without access to credit can still pay with an eCheck.
- Easy payments. Customers can “set it and forget it” by arranging a recurring payment to withdraw automatically.
Bottom line
Enabling eChecks provides your customers with a convenient option that supports how they want to pay while improving business processes.
1 The Digital Transformation of SMEs: The Future of Commerce, Visa, 2019
2 AFP Survey Finds Businesses ‘Actively Shifting’ to ACH and Other Electronic B2B Payments, NACHA (National Automated Clearing House Association), 2022
3 2023 ACH Network Volume and Value, NACHA (National Automated Clearing House Association), issued 2024
Disclaimer: Case studies, comparisons, statistics, research, and recommendations are provided “AS IS” and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. Visa neither makes any warranty or representation as to the completeness or accuracy of the information within this document, nor assumes any liability or responsibility that may result from reliance on such information. The information contained herein is not intended as investment or legal advice, and readers are encouraged to seek the advice of a competent professional where such advice is required.
