ACH Vs. eCheck: Is There a Difference?

As a small business owner, it’s likely that you’ve been looking for ways to speed up the payment process and get more cash flowing into your company a lot sooner.

When choosing among payment options for your small business, you may have come across the terms ACH and eChecks. You may have even heard the two used interchangeably! However, there are important distinctions to keep in mind when it comes to eChecks vs. ACH payments. At SeamlessChex, we specialize in eCheck and ACH payment solutions, so we’re happy to help answer all of your questions.

ACH Overview

Even if you haven’t used ACH processing in your small business yet, there’s a good chance that you have in your personal life. For example, when you pay your mortgage online and supply your bank account number and routing information, this is ACH in action. ACH stands for Automatic Clearing House, which is really just a fancy term given to this vast electronic network for financial transactions.

There are a few key points to understand about ACH:

• Traditional ACH does not offer any verification or balance confirmation services so payments can be returned.
• With ACH the threshold for returns or chargebacks is 1% and your account is likely to be terminated once you are close.
• Standard funding time is 72 hours although next-day funding is available upon approval.

eCheck Overview

The SeamlessChex eCheck product is a software platform that allows businesses to verify and remotely create eChecks that they can print and deposit themselves.

Other points to note:

• With eChecks vs. ACH payments, there is a higher threshold for returns and we provide verification to confirm account balances in order to reduce costly return checks or NSF fees.
• The standard settlement time for all checks is 72 hours, although many banks credit your account the same or next day when we deposit.
• There are no transaction limits.
• Our software also offers the option to print on plain paper or check paper and use your bank’s mobile app to take a picture and deposit.

SeamlessChex offers eCheck processing services for accounts that meet the requirements. With our eCheck processing services, we deposit the checks directly into your bank account. Currently, we offer eCheck processing with customers at the following major banks: Amtrust Bank, Banco Popular, Bank of America, Bank of the West, BB&T Bank, BBVA, BMO Harris, Chase, California Bank and Trust, Capital One, Chase, CitiBank, Citizens, City National, Comerica, Fifth Third, First National Bank, First Republic, FirstBank, HSBC, Huntington, IberiaBank, Key Bank, M&T Bank, Navy Federal, Peoples, PNC Bank, Regions, Republic Bank of Arizona, Santander, Silicon Valley Bank, Space Coast Credit Union, SunTrust, TD Bank, Union Bank, US Bank, US Century, Wells Fargo, West Valley National Bank, and Woodforest Bank.

Benefits of ACH and eCheck

Direct bank transfers, i.e. both ACH and eCheck processing, offer a number of benefits to small businesses:

• Reduces cost – the fees involved are fixed and generally nominal compared to credit card transactions. In addition, going paperless helps to improve efficiency and cuts down on multiple trips to the bank.
• Improves cash flow – the easier it is for customers to pay you, the quicker they are likely to do so. This will help your small business optimize the accounts receivable process and free up cash flow in order to meet your current obligations and plan for future growth.
• Security – offering online direct bank transfer (ACH or eCheck processing) will give your customers peace of mind as it is one of the most secure methods of payment, backed by banking institutions and the United States Treasury.

So What’s the Key Distinction Between ACH and eChecks?

There are a few key categories of differences between eChecks vs. ACH payments that you should be aware of.

Setup
The requirements for ACH are much more elaborate than eCheck. These include the following:

• Credit check
• Personal guarantee
• Bank underwriting
• Tax returns (in some cases)
• Bank statements (must show balances that equal the daily volume requested)

Overall, these requirements have limited ACH’s utility as a method of payment, especially for small businesses that don’t yet have an established track record. On the other hand, eCheck enables secure transactions without these steps.

More specifically, with SeamlessChex, small businesses benefit from instant account setup as there is no credit check, bank underwriting, or other documentation required. It is the perfect solution for startups as well as non-traditional or high-risk businesses who wish to benefit from accepting check payments online.

Fees
ACH fees are around 1% of the transaction amount in addition to a monthly fee of around $25. On the other hand, the SeamlessChex eCheck solution charges a flat monthly fee based on the number of checks businesses need to accept and the level of verification required. As you can see, eCheck vs. ACH offers a cost-effective solution for businesses with high ticket transactions.

Efficiency
Technology plays a huge role in the efficiency of payment options. When you leverage the benefits of a powerful cloud-based platform like SeamlessChex, accepting payment via eCheck becomes much faster than ACH.

How to Get Paid Faster with the Right Payment Company

SeamlessChex allows you to accept and verify checks via the web, phone, or fax, and process payments via ACH or eCheck, all with enhanced security.

Need more convincing? SeamlessChex offers a 100% free trial. To learn more about the ways SeamlessChex can benefit your small business, and to sign up for a free trial of the leading check processing software platform, visit our website today.

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