1. What is ACH/EFT and what is an Instant eCheck?
ACH (Automatic Clearing House) is the electronic alternative to traditional paper check payments. EFT (Electronic Funds Transfer) is an alternative name for ACH. ACH is a secure network used to connect banks to each other. It is through this network that electronic payments, electronic transfers, debit-card payments and direct deposits can be processed.
Payments through the ACH network can be categorized in two ways:
1) When a business accepts payments electronically from a customer or another business. This is known as ACH Direct-Debit.
2) When a business pays others electronically. This is known as ACH Direct-Credit.
ACH Direct-Debit processing means that you are debiting funds directly from your customers' bank accounts and depositing them into yours. ACH direct-debit can also be referred to electronic checks, echecks, automated clearing house and direct payments. Approximately 90% of our customers use our ACH Direct-Debit service to accept customer payments. The other 10% use our ACH Direct-Credit service to pay out commissions, salaries, bonuses and expense reimbursements to their employees. ACH Direct-Credit processing means that you are depositing funds into someone else's bank account electronically (i.e. direct deposit for a paycheck).
An eCheck is a check that is converted from paper to an electronic check. This is done by using the routing number and account number of the person writing the check. It is not necessary for you to have the check in hand and not necessary to have the check number. The check can then be processed using the ACH network or the Instant eCheck network.
2. How ACH and Instant eChecks work?
ACH and Instant eChecks are 2 forms of electronic check processing. Electronic check processing is the means by which you can take a paper check and submit it for payment electronically instead of taking it to the bank. Payment Helpdesk provides easy electronic-check processing that requires no expensive scanners or other hardware--you simply enter check information (bank name' account number and routing number of the customer) and submit the transaction. It's that simple and the money is directly transferred from the customer's bank account to your account. ACH transactions take about 4 days for the money to settle in your account and Instant eChecks, take 1 day using the Check 21 rule and exclusive patented technology.
By setting up your account with the optional ID verification, you can be sure that the person giving the check is who they say they are. You can also optionally guard against bad check writers and receive notifications for NSF (non-sufficient funds) transactions.