An eCheck, or electronic check, is a digital version of the traditional paper check but processed entirely electronically through the banking system. Instead of manually writing a check, an eCheck allows funds to be transferred directly from one bank account to another using secure online systems. Like a paper check, it requires the payer’s bank account number and routing number to initiate the transfer, but the entire process is automated and handled through the Automated Clearing House (ACH) network.
eChecks are commonly used for online transactions, recurring payments, and business-to-business transfers. They offer a secure, convenient, and efficient alternative to physical checks, eliminating the need for manual handling, postage, and potential delays associated with mailing paper checks.
Here’s how the eCheck process typically works:
Authorization: The payer authorizes the transaction by providing their bank details and giving consent to withdraw the specified amount.
Processing: The eCheck is processed through the ACH network, which facilitates the electronic movement of funds between financial institutions.
Clearing and Settlement: The transaction is cleared within 1-3 business days, during which the payer’s account is debited, and the payee’s account is credited with the funds.
Confirmation: Both parties receive confirmation once the funds have been successfully transferred.
In many cases, the eCheck can be sent to your email in a notification or receipt format. From there, you can deposit it using your bank's mobile app, following a simple procedure: upload a picture of the eCheck or enter the relevant details to complete the deposit.
eChecks are not only faster but also more secure than traditional checks, as they reduce the risks associated with lost, stolen, or fraudulent paper checks. They also leave an electronic trail that can be easily tracked for future reference.
Note: E-Checks expire 90 days after they are sent.