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Echecks with Guarantee
Buyers who shop on the internet expect fast shipment and delivery. Merchants must be able to fulfill orders quickly, otherwise sales will be lost. With echeck guarantee:
- Merchants can ship product immediately gaining competitive advantage
- Merchants selling digitally downloads products can accept echecks without worry
- Echecks are authorized as quickly as a credit card transaction
- Contingent liabilities are drastically reduced
Facts about echecks
- Online merchants who add echecks realize 3-8% of their sales coming through checks, with at least half of that representing sales that would have otherwise lost (Cybersource)
- Echecks now comprise 9% of internet sales.: (Celant Research)
- 23% of households (US 50 million adults) do not have a credit card.: (Federal Reserve)
- 45% of consumers with credit cards are within 5% of their credit limit. (Federal Reserve)
- Electronic checks are first choice for the next payment option medium and large online sellers plan to add (Cybersource)
Why do internet merchants need guaranteed echecks?
Echecks are a WEB ACH batched transactions. That means when a customer buys an item using an echeck, authorization is not "immediate" like credit card transactions. It takes 24-48 banking hours (which do not include weekends and holidays) for echecks to clear. Trailing returns on some echeck transactions can take even longer.
In order to be sure customer funds are available, merchants without check guarantee must wait for echecks to clear before shipping products or authorizing downloads. With guaranteed echecks, merchants can ship immediately.
Echeck guarantee covers all checks except
- Fraud. An illegal transaction such as a fraudulent echeck cannot be guaranteed.
- Closed accounts. As part of the approval process, accounts are verified for correct routing and account numbers. If an account is closed before the check clears, the check cannot be guaranteed.
- Consumer stop payments. It takes more effort on the part of a consumer to deny an echeck authorization than a credit card transaction Stop payments require the consumer to fill out an affidavit with their bank stating that the consumer denies the authorization of the transaction. For high ticket transactions, merchants can add a consumer identity verification product which will make it difficult for a consumer to deny authorizing the purchase.
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