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Why Accept eCheck Payments? How They Work

January 17, 2024

Is your business still relying on traditional paper checks for transactions?

Waiting for payments in the mail can create challenges in reconciling accounts, slow down operations, and impact cash flow.

Diversified Payments offers a faster, more modern alternative for accepting payments through eChecks.

If your company aims to accelerate payment cycles and enhance the payment experience for customers, embracing eChecks is the solution.

What is an eCheck Payment?

eChecks are digital payments that operate similarly to traditional paper checks, utilizing bank account and routing numbers to transfer funds between accounts.

These payments are processed electronically through the automated clearing house (ACH) network, which is the national network facilitating electronic funds transfers (EFTs).

Typically, companies integrate eChecks as an additional payment method for customers who prefer alternatives to credit card payments.

eCheck vs ACH: What’s the Difference?

While ACH refers to the payment processing method through the automated clearing house network, both eCheck and ACH transactions essentially describe the same type of payment method.

How does eCheck Payment Processing Work?

From the perspective of the ACH network, eChecks are processed similarly to paper checks. However, the process is much simpler for companies and customers.

1. Get authorization: Obtain customer authorization for the transaction, crucial for fulfilling Regulation E and Nacha compliance requirements. Diversified Payments offers authorization requests via email or text message for immediate customer signatures.

2. Take the payment(s) through your software: Input payment information into your payment processing software. Diversified Payments provides various channels for payments, including online payments, email or text payment requests, and employee-initiated payments.

3. Receive funds: After verifying, submitting, and processing the eCheck payment, the funds are deposited into the designated merchant account. For businesses with complex rules on fund allocation, Diversified Payments accommodates multiple accounts.

How Long Do eChecks Take to Process?

Some companies overlook the processing time for eCheck payments, leading to challenges in reconciling accounts.

Typically, eCheck funds have an average hold time of approximately 2-3 business days, meaning funds are usually available about a few days after the transaction is submitted. It's important to note that ACH network transactions are submitted as a batch, often at the end of the business day.

Are eChecks Safe for Businesses?

Yes, eChecks are secure for companies and can be even safer than traditional check payments.

Digital transactions eliminate the need for physically transporting checks to the bank, enhancing overall safety. Diversified Payments ensures additional security features, such as ACH Verify to validate bank account information and tokenization and encryption of payment information.

Diversified Payments securely stores customer eCheck payment information, relieving your company of the burden of managing this sensitive data.

Should my Business Accept eCheck Payments?

Many companies may be unsure if eCheck payments are suitable for them. However, customers increasingly expect this faster, more convenient, and secure payment option. Failing to offer what customers expect can create obstacles to timely payments.

ACH transfers benefit office processes by:

  • Eliminating the need for customers to mail physical checks, promoting prompt payments and reducing abandonment.

  • Reducing unnecessary trips to the post office or bank, as everything is managed within your payment software.

  • Providing easier tracking of digital payments, associating account numbers with payments for accurate attribution.

  • Simplifying monthly reconciliation when all transactions are automatically recorded within a single payment system.

Diversified Payments ACH Payment Services

Diversified Payments offers eCheck payment processing services to enhance the customer experience. Our software allows you to accept ACH payments through various channels:

  • Online

  • Email

  • Text

  • Employee-initiated through a virtual terminal

  • Web chat

  • Recurring payments

In addition to ACH payment processing, we also provide credit card processing and the ability to send digital communications to customers.

Take control of your business today by handling documents, requesting payments, and obtaining eSignatures all in a single message to customers via email or text.

If you are interested in accepting ACH payments for your business, visit Diversified Payments sign up for a meeting with an eCheck advisor today.


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