Echecks vs I-Checks

by Elizabeth Murrow   An electronic check or echeck is an electronic transfer of funds wherein the money is taken directly from a bank account. It is the method of converting a paper check into an electronic form. The customer hands in a check to the cashier and the cashier scans the check, stamps it as VOID and returns the check to the customer. The account's routing number and account number are used to draw funds from the account. The use of echecks has been developed to reduce the amount of money spent in accepting checks at the Point of Sale (POS). It also aims to speed up the settlement of funds into the shop's bank account through the Automated Clearing House (ACH) network. More and more businesses have already been accepting echecks as a form of payment. Usually, echecks are verified by the use of the national negative database to determine if the check should be accepted or not. Likewise, the use of echecks normally don't need digital authentication since the customer is physically present during purchase. But, what if the customer is not physically present and there is no way that you can ask him for identification, what would you do? This is where the use of i-checks will come in. An internet check or i-check requires a more complete verification and digital authentication during a transaction as compared to the use of echecks. The rules that govern ACH transactions are strictly followed during the use of i-checks. Since you cannot see your customer and ask for his identification, you will need to use extensive verification methods. The use of i-checks not only uses a negative database the verify the check but, it also uses multiple negative and positive databases that will help determine bad check writers, real-time information about the customer's bank and status, and so on. Moreover, it also uses fraud databases, velocity algorithms and a secure address verification that will verify the customer's name and address. The authentication process does not stop there. The customer's digital signature is captured to complete the process. This is one of the requirements when it comes to electronic transactions. Once the verification process has been completed and the i-check is cleared for use, customer's and businesses no longer have to worry about the risk of financial losses from fraud and even fines from banks. There are both advantages and disadvantages with the use of echecks and i-checks. Find out what works best for you and you're business and do some research before finally choosing one payment option. (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 <a href="http://allaboutecheck.wordpress.com/">http://allaboutecheck.wordpress.com</a> and http://www.echeckprocessing.biz. 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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