Echecks vs. Paper Checks

by Elizabeth Murrow One of the major reasons why most people prefer using electronic checks compared to paper checks is that it is more secure, fast and convenient. Aside from that, some people, even though they have checking accounts, doesn't always mean they have credit cards as well. Echecks come in handy. With the increase of businesses including echecks in their payment options, it can almost be used to purchase anything. The big question here is this: Will echecks permanently replace paper checks? Of course, there are still people who prefer using paper checks. After all, this is the first check ever used. But how exactly does an echeck differ from that of a paper check? Paper checks are the most common type of non-cash payments. The echeck is an electronic version of the paper check. Despite the increase in the usage of echecks, the paper checks remain to still be at the top choice of consumers. When it comes to characteristics, electronic checks provide a peer-to-peer solution for direct exchange. It can be used against existing bank accounts and are based on existing business practices. According to research, paper checks are most costly compared to echecks. The estimate range for a life cycle cost of a paper check ranges between $.75 - $3.00 per check. Costs are divided into three categories: supplies, handling and uncollected checks. And these include everything from check stocks, business handling costs, banking costs and so on. You may think that the cost is small enough but annual expenses are estimated to be roughly $40 billion. Because everything is done electronically, echecks cost less. Handling paper checks use a lot of time and effort in handling while echecks are more fast and convenient. Not only does it cost less compared to paper checks, the use of echecks will help both payees and payers save more money. Of course, these are not the only things that we should think about. When it comes to errors, paper checks are forgiving. No matter what type of error you commit, the chances of it getting processed, cleared and settled is still high. It's different when it comes to echecks. Since everything has to go through an authorized party before it can be processed, there is less room for errors making it more efficient. In the end, the choice of using an echeck over a paper check or vice versa is still up to you. Different types of payment options work for different types of people. You just need to find the right payment option that is suitable for your needs and expectations.   (Elizabeth Murrow currently works for a payment processing solution company. Being in the business for quite a long time now, she has been continuously sharing her knowledge through various lectures and blogging, including http://allaboutecheck.wordpress.com. Born and raised in California, Elizabeth now lives in Australia with her husband and two kids. She likes to travel during her free time.)

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