Banking and Finance

eChecking: A Guide to Electronic Check Payments

July 27, 2021

Writing paper checks appears to be a thing that will end when the current population of over 65 stops using them. From 2003 to 2012, the occurrence of writing checks decreased by half, from 36 billion to 18 billion, with the rate never wavering much from about 2 billion per year. 

With checks becoming extinct, though, what happens when you really do need to write someone a check for something? Just Venmo them cash? Nah. You can write an eCheck. It’s basically just a digital version of regular checks, and chances are you’ve actually probably already used the features and functions of eChecking without even knowing it!

Read on for our complete guide to electronic check payments and how to make the most of eChecking in today’s digital age.

What’s an eCheck?

An eCheck is a payment that you write and send electronically. The “e” in eCheck implies it’s electronic and doesn’t require paper or ink (like traditional checks do). However, the name also comes from the fact that, back at the beginning of the internet age, these types of checks could be used for eCommerce payments since physical checks didn’t make sense for online payments.

However, it's actually even simpler than that. In the US, eChecks are just another name for paying via the ACH network. When you initiate a payment via the ACH network, what happens? The money gets withdrawn from your account and gets deposited straight into the recipient’s account.

This is also known as a direct deposit, and chances are that, if you’ve worked for a large company in the past decade or so, you’ve likely set up a direct deposit in order to receive your salary each month. While it was probably called an ACH transfer or direct deposit, it was essentially an eCheck from your employer.

Not sure what a direct deposit is? Read our guide on What is a Direct Deposit?

The Benefits of Using eChecks

It goes without saying that one of the biggest benefits of using eChecks is the fact that everything is digital. This does away with the need to order physical checks (which can be dangerous to have around; if the wrong person gets a hold of your checks and can forge your signature, they can write and cash checks to themselves).

As well, there’s the added benefit of the speed of this payment method. Once you submit an eCheck payment, the processing is nearly immediate and the recipient will usually receive the funds within 24 hours. Likewise, because you’re sending the payment digitally, both you and/or the recipient will be able to receive a receipt of the payment for confirmation straight to your email.

What about the business benefits of using eChecks? If you’re a small business owner, relying on electronic check payments is a great way to not only save money on physical checks but also a great way to reduce the hassle of writing and sending out physical checks to your employees. 

This helps streamline the accounting process and also helps speed up the processing time between sending out a payment and having the funds withdrawn from your company account. The last point is important to remember when it comes to electronic check payments! The float time between sending out physical checks and when an employee cashes a check can mean that you might think you have more money in your company account than you actually do. With eChecks, that’s not an issue at all.

Are eChecks Secure?

eChecks, which we've now established are basically direct deposits or ACH transfer, are very secure. eChecks, in terms of security, work similarly to paying online with a credit or debit card; when money is withdrawn from your checking account, your bank is taking care of ensuring it arrives safely to the recipient and vice versa (in the case, for example, that you’re the one receiving the payment via your employer). 

During this 24 to 48 hour period, you have time to get in touch with your bank in case anything goes wrong and you need to stop payment (not all banks will allow this; so be sure to check with yours!). That’s obviously not the case when writing and sending out a paper check. 

If you’re a business owner, eChecks can also protect your business from fraud because eChecks allow eCommerce merchants to accept electronic payments without worrying about potential fraudulent checks written by hand.

Why Start Using eChecks?

If you’re still writing paper checks then you need to catch up with the times! The benefits of electronic check payments are numerous, including the fact that:

  • These types of direct deposits are often free.
  • You receive money faster if you’re the recipient of an eCheck.
  • No, really, eChecks get sent out way faster than paer checks. Once your employer’s payroll department releases the money via an ACH transfer, it can show up in your account to use within 24-48 hours.
  • Paying bills is easier with an eCheck deposit. When you know a direct deposit will for sure hit your bank account on a certain day, you can more accurately plan for automated payments.
  • With most banks, if you set up a direct ACH deposit, they’ll waive monthly fees.

Last, and most importantly, making an electronic check payment is super easy! We’ll show you how…

Setting Up Electronic Payments with Cheese

With a Cheese Debit Card, you’re not only able to enjoy tons of cashback perks, but you’re also able to access your paycheck up to two days earlier by setting up direct deposit with us. How does that work? Usually, traditional banks “float” your cash to earn double the interest for a day or two. At Cheese, we never float your cash. 

With our debit card, you can not only enjoy $0 in fees and super savings (like 10% cashback at your favorite stores), but you can also set up direct deposit straight to your account, and we’ll give you access to your money up to two days earlier than at a traditional bank.

Read more here on How to Set Up Direct Deposit with Cheese in 1 Minute.

Interested in enjoying all of the benefits of electronic check payments (i.e. super fast direct deposit) along with our other perks? Download the Cheese mobile banking app for either iOS or Android to get started.