eChecks are very important to many businesses, because of the fact that there are no chargebacks, lower transaction fees, plus the fact that almost everyone has access to a check, resulting in more buyers for your products or services. There can be some downsides to eChecks also, so your business must weigh all the available data to see if accepting eChecks is the best possible solution.
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Here is the story of one business that experienced problems after launching an eCheck campaign:
A couple of days went by after setting up the ability to accept eChecks, and everything was going okay. There were a lot of eChecks being accepted, we were excited because of the added sales from accepting the checks. We were even suggesting people pay with a check, over using a debit or credit card, because of the savings with the lower fees for eCheck processing. We immediately put the eCheck payment option on our website, because of the positive effects we had experienced the first few days. Everything was looking great for us, because we would get our money faster than accepting a paper check, even though the customer would be debited quicker, because if they used a credit card they would have until the bill needed to be paid.
The problems began on the fifth day after we began to accept eChecks. It just kept happening, over and over again, the returned checks just kept coming in. There were different reasons the checks were returned.
Some of those reasons included:
- Insufficient Funds
- Fraud
- Stop Payment on the Check
Most Internet scams involve bank frauds, because all it requires to take money from your bank account, is the bank routing number and your account number, causing everyone to be vulnerable because both those things are printed on the face of the check.
Insufficient Funds is also a huge problem that causes returned checks. This can increase your eCheck Fees significantly. Then there are the people that call the bank and stop payment on the check, many knowing you can not get the product back. One of the most annoying factors about this was the returned check fee we had to pay on top of not collecting the funds, and in most cases being out the product. Credit card payments do not have this issue, unless there are chargebacks.
After futile attempts to collect on the returned checks and the charges we incurred, or even try to get the product back, we realized we had made a mistake. We promptly removed the payment option from our store and our website, but not before a lot of damage had been done. We have now learned there are some merchant service providers that provide companies with an instant check verification service. Always check with the different merchant service providers to understand everything that they have to offer you. Finding a company that will offer you a dedicated account support person is worth its weight in gold, because there are so many different variables and aspects to know about finding the right merchant service account.
This is just one businesses experience, and you will have to look at your individual situation and weigh your option of taking eChecks, with all the costs and trouble associated with accepting eChecks plus the possibility of returned checks. There are merchant service account providers that have options to alleviate many of these issues of taking eChecks. This solution allows an additional payment option, that in some cases increases the businesses customer base, and customer loyalty, which can result in more sales.
The lower rates that accepting eChecks offers, can add up to a considerable amount of money. Everything is also handled online for convenience, cutting down on office expenses. Reconciliation of your account is easy using the reports that track the eChecks and other electronic transfer payments. You will also be able to ship your products sooner, because the eChecks will clear sooner, than paper checks would, especially if you are using the up front transaction validation, which returns transaction status quicker. When you are searching for the right merchant service provider to process eChecks, look for a secure data transfer that uses 128-bit SSL, Secure Socket Layer technology that provides secure IP, Internet Protocol transactions.
VIP Credit Card Processor offers merchant services to businesses, through Authorize.net, which is a top payment solutions provider. Authorize.net offers a variety of solutions to help businesses with the problems they run into during every day business. Internet marketing businesses have found solutions with Authorize.net, along with mail order, telephone sales, retail business, and mobile.
Here is what another eCheck merchant has to say:
We sell jewelry, baby items, apparel, home accessories, along with other gift items for many occasions. We opened the store in 2007, in Wedgewood Seattle, as a brick and mortar business that was going to branch into eCommerce. When we were shopping for POS, point of sale terminals along with an inventory management system, our major requirement was, that it interfaced with Authorize.Net Payment Gateway. The reason for this was, the fact that we had heard so much about them from other business owners, positioning them as a reliable and scalable payment processing solution provider.
After researching Authorize.net and discovering they offer payment solutions for eCommerce, eChecks, debit and credit cards, mobile, kiosk, and POS, among other solutions. The best part was how they walked us through setting up everything, including the credit card processing terminal. “Processing credit card transactions through POS-IM and Authorize.Net has been everything that we expected it to be,” said Marconi. “The Authorize.net platform is exceptionally reliable, and the time it takes to receive an authorization response is fantastic – usually a second or two.” This has been found to be very useful, especially during holidays, like, Mother’s Day, which are extremely busy, or other events that we hold for promotion.
The virtual terminal used for processing phone orders has been especially useful, along with the wide variety of report tools that are offered online for convenience. We have found that probably the best feature is the fact that it takes very little effort to manage our sales, inventory, and payment processing, to free a lot of time that we can re-direct to our customers, in special services like gift wrapping, gift registries, and personal shopping. We also have the peace of mind, knowing that when our business grows Authorize.Net and their POS-IM will be there for support and to meet our business needs.
Merchants require a payment gateway, because they do not have the resources, expertise or money to create their own direct, secure connection to the payment processing network. Payment gateways provide the business with the complex infrastructure required to accept electronic payments, plus the security that is necessary to be able to securely connect their company web sites to a payment processor. In plain English, the payment gateway works like the traditional credit card terminal that is used to swipe credit card payments in the brick and mortar business. When looking for a merchant service provider, investigate the payment gateway processors, to find one like Authorize.net that has a wide variety of payment processor services, at an affordable price, with very flexible terms.
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