Over the past 25 years, e-checks have made significant gains in popularity. Many retailers and small business owners now prefer this payment option—and for good reasons too.
eCheck payment solutions provide an electronic method to conduct transactions. Conducting transactions electronically is much faster and more secure than traditional paper checks. It comes as no surprise, therefore, that paper checks are disappearing.
As the technological landscape has continued to evolve, the paper check may have outlived its usefulness. A whopping 1.8 billion fewer checks are received by banking institutions annually, with experts projecting that, at this rate, paper checks could disappear completely by 2026.
The steady decline in the number of paper checks written every year is a testament to the power and value of eChecks and their ability to make life easier for business people.
eCheck Benefits: Key Ways eChecks Make Life Easier
Some benefits of eChecks and key ways eCheck Payment Solutions can simplify your bookkeeping processes and make your life easier include:
1. Process Faster Than Paper Checks
eCheck Payment Solutions use the same information that paper checks use to process transactions. The account number and routing number that we're used to seeing on the bottom of paper checks remain the same.
With an electronic check, the way the transaction is processed is different. eChecks use a third-party processor to handle the process of transferring funds between two banking institutions. That processor is called an Automated Clearing House or ACH for short.
ACH digitally exchanges the routing information and bank account numbers between the two banks to complete the transaction. Funds are immediately withdrawn from the customer's account and typically take 3 to 5 business days for the merchant's account to receive them.
Gone are the days of floating checks for a few days until there's money in the account. In the past, customers were able to write paper checks with the confidence of knowing that they wouldn't clear for at least seven business days. With ACH, funding occurs immediately, and the possibility of receiving a bad check is not an issue.
By requiring the money to be in the account at the time of the transaction, merchants can rest easy knowing that they don't have to deal with the headaches bad checks can bring. For merchants, the ACH process is a benefit that reduces the number of extra fees incurred from bounced checks. To optimize your business, eCheck Payment Solutions are an excellent option.
2. Reduce Expenses and Save Time
When a merchant accepts a paper check from a customer, manual labor is required to start the transaction process. The merchant side of the transaction process begins with an employee driving to the bank to make the deposit or utilizing the services of an armored truck company.
Job duties need completion throughout the workday, and having your employees out on bank runs can waste valuable time and money. If you're utilizing armored truck services to deliver deposits, you could be paying through the nose.
In 2021 alone, businesses spent over 3 billion dollars per year on armored truck services. Owners and retailers who use digital payment options can reduce their need for armored truck services. With the benefits eChecks provide, you'll reduce employee costs and improve your profit margins.
Saving money on delivery expenses is just one of the ways you can cut costs and increase company profits. Eliminate checks, envelopes, postage, and reconciliation time spent entering transactions to reduce business expenses every month, and you'll save even more.
It doesn't matter how your business keeps its books. You still need to pay your employees for the work required to process payments. According to Bill.com, the average business owner pays more than $24,000 per year for paper checks and $1,200 per month in hourly wages. eChecks will save you more money on expenses, and their transaction fees are lower than credit cards.
3. Minimize Errors & Fraud
eCheck Payment Solutions rely entirely on digital transactions. This characteristic alone reduces the chance for human errors and omissions. Anyone who has ever kept the books for a company can tell you that entering incorrect check numbers or missing checks is always a risk.
With paper checks, handwriting describing the amount or recipient can also be a problem, but with eChecks, that is no longer the case. Whenever information is entered into a system manually, there is a possibility of errors at every data entry point. Secure digital payment systems store data and records and automatically reduce the risk of mistakes in the transaction process.
Paper checks are the second most targeted instrument for fraudsters behind credit cards. Stolen checks are an issue for both customers and businesses. According to the American Bankers Association, over 35% of banking fraud occurs because of check fraud. For a criminal, it's relatively easy to forge a signature and make a fraudulent transaction.
However, eCheck processors provide extra layers of security like identity authentication, duplicate check detection, and real-time verification to prevent as much fraud as possible. Digital payment solutions can't guarantee that fraudulent activities won't occur, but they are very effective at reducing the likelihood that you'll become a victim of fraud.
4. Integrate With Popular Bookkeeping Software
Now more than ever, business owners are expected to do more with less. Software integration makes it easier to keep costs low while running a business at full throttle. They also make business processes less painful and more efficient. Integrations allow you to process the transaction quickly and save time. All the user needs to do is create transactions. The eCheck Payment Solution will take over from there and process the entry.
With integration, you can quickly link your online account to your software to create a connection between the two services. All that is needed are the details of the transaction. Your eCheck Payment Solution will complete the transaction.
Payment exchanges continually look for all transactions and send them out within 5 minutes. This feature helps small and medium-sized business owners pass sales tax audits. The result? Less work for employees and transactions are processed quickly and efficiently. Nothing changes in your current processes other than the speed of completion.
If your company utilizes software other than Quickbooks, be sure to check to see if the eCheck platform you're considering offers the integration you need.
Those are just some of the key ways eChecks enhance and streamline your payment processes, while making your bookkeeping easier. Now it's time for you to research/node/237 and determine which particular eCheck Payment Solution is best for your business.
Put in the work, integrate eCheck payments, and enjoy the benefits!