An Echeck is known as Electronic check. It is a digital substitute for bank paper check. Echeck is commonly used for internet or web-based transaction. There is not so much difference between Echeck and paper-based bank checks. Echeck is an electronic version of a paper based check. It contains the same information as paper based bank checks. It can also exchange directly between many parties. Check writer will write a check for the payee. After that payer will convert it to digital form by using an electronic device. After conversion check is sent it to the payee electronically. The payer must authorize the payee for the transaction. Authorization can be given by phone, signed order form or any method. The payee will go the bank with that check and deposit it in his bank account. Before depositing the amount to payee account, the bank will validate the information. After successful validation, the payee will receive the amount. Echeck processing needs a payment gateway for transactions.
Benefits of Echeck:
1) Reduce frauds.
2) Automatic validation of content
3) Cheaper than other payment options.
ACH payments are called Automated Clearing House. In ACH, funds are transferred from one bank to another bank with the help of intermediate. To complete a transaction, the payee must have bank account details of the payer. The payee must have details of payer’s type of account, bank account number and ABA routing number. With that information, the transaction can be processed. While processing transaction bank will check account of the payer if he has enough amount to fulfill the requesting amount. If the amount is not sufficient, then the bank will decline the transaction.
Benefits of ACH:
1) Easy to handle.
2) Less expensive than plastic.
3) Long distance payments.