Direct Response Blog, Free DRTV Industry Web Log

jjensen | 29 March, 2006 16:37

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In 1998 it became legal to accept ACH transactions over the phone without an actual check or signature from the customer. This opened the door for the convenience of electronic checks (e-checks) via phone or internet sales. An estimated 40% of all consumers do not have access to a credit card. Therefore, offering e-checks as an additional payment option is an attractive alternative and facilitates faster phone and internet sales.

customer convenience is improved because customers who do not have access to credit cards need another method of payment, e-checks are that method.
e-checks also make life easier for a customer, instead of having to mail in a check to pay for a product or service, it can easily be paid for over the phone or internet.
processing speed is increased because electronic checks can be cleared in a matter of days instead of the standard two to three weeks it takes to make sure a paper check has not bounced.
e-checks have priority over paper checks in the ACH system
e-checks can be electronically re-deposited for recollection of NSF's up to two more times, instead of only once for a paper check.
back office time is reduced because tallying deposit slips, copying checks, and going to the bank are all eliminated.
refunds can also be done electronically. This saves the vendor time and money as no more paper checks need to be drafted and mailed to clients.
reporting is easy because it is all electronic and available daily on-line.
transactions are processed in batch mode if desired, for speed and convenience.

e-checks are typically associated with a lower when compared to credit card costs.

some customers may still be unfamiliar with the e-check process (giving their routing number and account number) so you may need to ensure that your call center agents or website is familiar with the process so it works smoothly.

e-checks can not be authorized or preauthorized as credit cards are. Because of this, merchants must be willing to wait until the e-check clears prior to shipping merchandise unless they want to ship before clearance, which may take between 3 to 10 days.