How Electronic Check Payment Processing Works

Merchant Basics

There was a time — not so very long ago — that when a person wrote a personal check to make a purchase, the recipient delivered it to their bank for deposit and it was processed manually. It was a process that could take days to complete, which meant the depositor had to wait for the funds to clear.

Today, new technology has eliminated much of the time and effort of the past by turning a paper check into an electronic transfer (debit), also known as an electronic check or e-check. If you’re a merchant or service provider, this means funds are electronically transferred from a customer or client’s bank account directly into your bank account through the Federal Reserve Bank’s Automated Clearing House (ACH) system.

Electronic check payment processing is check cashing simplified, a hassle-free and inexpensive way to get paid quicker. It is also just one of the many important merchant services that TransFirst® provides to its clients to meet all their payment processing needs, including credit cards  and debit cards. We offer electronic check payment processing through CrossCheck®.

The e-Check Process

The e-check process begins when a customer writes a paper check at the point of sale. The clerk runs the check through a reader or imager that captures the required information, including the check number, account number and the number identifying the financial institution (routing number). The clerk enters additional merchant-related information to complete the one-time electronic payment from the designated account.

Depending on the merchant’s agreement with their payment processor, the check is verified or guaranteed by the provider. A receipt is generated and printed for the check writer to sign; the check is voided and returned to them. The transaction will appear on the customer’s bank statement as a debit, not a check. 

The merchant uploads the captured check information to their payment provider for processing, and the proceeds are deposited into the merchant’s account within 1 to 2 business days.

The process is similar for a check that is mailed in payment of a bill, except the check is retained by the merchant after it is voided. 

Benefits of Electronic Check Processing

Electronic check processing offers numerous benefits for merchants. It eliminates the need to take checks to the bank and speeds up deposits. There are no check deposit slips to complete, and it reduces the chance of checks being lost or stolen before they are deposited.

For merchants working out of more than one location, checks can be converted at each location and funds can be centralized in one main account. Guarantee programs expedite the collection process by discovering NSF (insufficient funds) checks and other returned items quickly. And some payment providers make account activity available online for easy record keeping.

Electronic Check Processing with TransFirst

TransFirst offers four comprehensive standard and premium e-check processing programs from CrossCheck that include features like check verification and guarantee, electronic check conversion (ECC) with imaging, reimbursement for returned checks, business check conversion and multi-check acceptance.

To add electronic checks to your payment processing options, talk to a TransFirst representative who can explain which program best suits your needs.

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