Is eCheck Safe? Know the Risks

Written checks have fallen by the wayside in terms of popular payment methods. But eChecks are more popular than ever. Accordingly, businesses that have integrated online payment methods into their infrastructure–and those that haven’t really should–may be concerned about the safety of eChecks for their customers’ sensitive financial information.

There are a few reasons that businesses should consider eChecks as a valid option for payment processing in 2020 and beyond. There are also a few risks that are important to consider when integrating them into a company and its customers. Compared to other online payment methods, eChecks have their own advantages, but in order to integrate them, business owners would do well to know how they work.

What are eChecks?

EChecks are virtual versions of conventional paper checks. They work the same way as traditional checks, to transfer funds from one account to another, except instead of using a paper check, the information on the check is conveyed online or over the phone.

Unlike paper checks, however, eChecks transfer funds through the ACH network. This means that they inherit the same benefits of any other Automated Clearing House payments.

This means that eChecks are considerably faster to process than paper checks, and the money will wind up in the merchant’s account more quickly. It also means, of course, that eChecks can be used when face-to-face transactions are not occurring, and without all of the problems inherent in sending checks in the mail. Indeed, just consider that the phrase “the check is in the mail” is an idiomatic expression in English that is used in order to mean that the check actually isn’t coming at all!

It also means that eChecks are much more difficult to cancel for the customer, which is, of course, beneficial for businesses that accept them. A customer usually has at least a few days to cancel a paper check before it is cashed, but this is much, much more difficult for customers to do when it comes to eChecks. And, while credit card payments can be subject to a chargeback at the whim of the cardholder for many months after a transaction has been successfully completed, attempting to “claw back” an eCheck payment after the transaction has been completed is extremely difficult for a consumer to accomplish, if it is even possible at all. In the absence of a lawsuit, this means that if a customer who has paid by eCheck wants a refund, they will have to negotiate directly with the business, and will usually only be able to get a refund if they can prove to the satisfaction of the business that they are legitimately entitled to one. Even then, the refund can be handled by the business through whatever method they like (such as a paper check or store credit), which also means that the business shouldn’t normally be subject to any additional fees.

Is eCheck safe?

ECheck is a safe payment method when processed by the right payment processor. That is, as long as there are electronic encryption standards in place to protect customers’ information and prevent fraud, eCheck is an extremely safe and profitable addition to an online business’s lineup of available payment methods.

For customers shopping online, eChecks are more convenient, and they are safer than paper checks because an eCheck is far less likely to fall into the wrong hands than a paper check. For businesses, not only are eChecks fast, efficient, and convenient, but they also mitigate some of the risks associated with being in a high-risk industry. Because eCheck payments are much harder to cancel or charge back compared with paper checks or credit card payments, companies in high-risk industries, like pharmaceuticals and gambling, should especially consider adding eCheck services to their arsenal. Tt is also generally a lot easier to be approved to accept eChecks than to accept credit cards, so they are a great payment option for businesses that cannot easily be approved to accept credit card payments for whatever reason.

The Takeaway

A payment processor with a good reputation can offer safe transaction services for businesses that want to expand the payment options they offer by accepting eChecks.

To start accepting eChecks or to sign up for a credit card merchant account, visit or call (888) 924-2743.

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