How to process e-checks

An e-check is the electronic version of the traditional paper cheques that are used to make payment transactions. This payment transaction is made directly through an individual’s bank account into the selected bank account.

The processing of e-checks

The process of e-checks is relatively straightforward. An e-check requires a ‘signature’ in a similar way as a traditional cheque does. The e-check is signed with the use of a digital signature by both the payer and payee on receiving the e-check. An electronic signature can be achieved through a digital certificate or smart card.

On receiving the e-check, the payee will deposit the e-check and subsequently receive the amount of credit as stipulated on the e-check from the payer. The payee’s bank will clear the e-check to the bank of the paying individual. The bank of the individual who wrote the e-check will then be charged from his/her bank account for the sum stipulated by the e-check.

The processing of an e-check charges the payers bank in order to credit the bank of the payee. The processing of e-checks can be achieved through ACH or Check21, ACH is known as an Automated Clearing House. There are few differences between the processes of using an ACH or Check 21 system. ACH however can take up to 7 days for funds to clear while Check21 is designed to ensure e-checks clear in a timely manner.

Individuals and companies wishing to make or receive e-check payments are advised to seek the assistance of a professional consultancy firm to ensure that the payment transaction is completed successfully in a professional and timely manner.

To learn more about e-check processing, please visit our E-Checks service page.