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Electronic checks overview
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What if the customer has "Insufficient Funds" (NSF)?
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What about Electronic check chargebacks?
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Electronic check transactions are NOT processed in real-time
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Processing Electronic check transactions
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Using Virtual Terminal to process Electronic check transactions
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Using WebLink to accept Electronic checks from your web site
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Using the Electronic check Activity Menu
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How do I obtain an Electronic check account?
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Electronic Checks Overview
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The system supports the processing of Electronic check transactions.
You must have a Electronic check processing account in order to accept
Electronic checks.
When you accept an Electronic check as a form of payment, you are allowing your
customers to give you their checking account information and the authorization to
debit their bank account directly as payment for goods or services. The customer
simply provides their bank name, checking account number, and ABA Transit/Routing
number. It is just as easy as providing a credit card as a form of payment. Using
your Electronic check account, the system then debits your
customer's checking account and transfers the funds first into your Electronic
check account, and then into your regular business checking account. The total time
that it takes for the funds to move from your customer's checking account through
the system and into your regular business checking account is approximately 5 business
days (Approximately 2 days slower than credit card funds). The flow of funds in
an Electronic check transaction is as follows:
Customer provides their checking information and authorization to merchant,
then..
The funds are deposited (by Electronic check) into the merchant's Electronic
check account and the customer's checking account is debited by the system
within 48 hours, then..
Once the funds have "cleared" successfully, the funds are transmitted (by Electronic
check) into the merchant's regular checking account within 48 hours.
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What If The Customer Has "Insufficient Funds" (NSF)?
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The risks associated with accepting Electronic checks are no different than those
associated with accepting credit cards. The funds from an Electronic check transaction
remain in your Electronic check account until the funds have cleared
or until the transaction is "returned" or "charged back". The system
will report/inform a merchant of a returned transaction and the cause thereof usually
within 2 to 3 days of the original transaction date. The two most common reasons
a transaction is returned are Insufficient Funds (NSF) or Invalid Acct (the bank
account number and routing number were typed incorrectly). Please note that a returned
transaction will cause a returned item fee to the merchant, which is usually $3.00
per item. It is a good idea to charge a customer a returned check fee for returned
transactions just like you would for returned checks. The typical fee to a customer
for a returned check or Electronic check transaction is $15.00. You must disclose
your returned check/returned Electronic check policy to your customer at the time
of sale.
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What About Electronic Check Chargebacks?
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Remember also that a customer has basically the same rights to chargeback an Electronic
check transaction as they do a credit card transaction. You may be required to provide
proof of authorization or return the funds to the merchant. In the event of a chargeback,
the customer's bank will chargeback the funds immediately and it is the burden of
the merchant to seek recourse for the funds, as with credit card chargebacks. If
your customer feels that they have been charged erroneously or without their authorization
they may dispute this directly through their bank with a chargeback. You should
encourage your customers to contact you if they have any problems or concerns with
their order, and you should properly disclose your refund policy at the time of
sale to avoid potential chargebacks. It is also a good idea to store receipts and
other records or proof of service or delivery for transactions involving credit
card or Electronic check payments. For merchants that conduct their business carefully
and with adequate customer service, chargebacks should not be a problem, as most
customers will be willing to resolve any disputes they have directly with the merchant.
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Electronic Check Transactions Are NOT Processed In Real-Time
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The Electronic check system is not set-up for real-time processing, involving immediate
authorizations and instantaneous responses like the credit card networks are. An
Electronic check transaction is not a guarantee of funds until the customer's bank
account has been successfully debited, which takes at least 48 hours from the time
of the transaction. Therefore, it is NOT advisable to accept Electronic checks as
a form of payment for a product or service that you provide immediately at the time
of sale. It IS, however, entirely appropriate as a form of payment for a product
or service that you "deliver" or that is a recurring service. Many customers prefer
to have their checking account debited for a monthly subscription service. Others
may not have a credit card but want to purchase a product for delivery right from
your web site or over the phone using their checking account. Indicating to the
customer to "allow 2 to 3 weeks for delivery" would give you ample time to assure
that the funds have cleared prior to shipment of goods.
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Processing Electronic Check Transactions With e-Commerce |
If you have a Electronic check account, the following features
are available to help you perform Electronic check transactions and to assist you
in managing your Electronic check transaction activity.
Virtual Terminal - (it is expanded to allow Electronic check transactions)
WebLink - (it is expanded to allow Electronic check transactions)
Electronic check Activity Menu - (the main Electronic check reporting menu)
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Using Virtual Terminal To Process Electronic Check Transactions
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For the basics on using Virtual Terminal see the section entitled "
Virtual Terminal" above. Once your account is configured for Electronic
check acceptance, you will see an additional payment option call "Checking Account"
in the list of available payment methods. Three additional fields will also be visible:
"Bank name", "Account Number" and "ABA Code". The blue help prompts on the Virtual
Terminal window will assist you in providing the right information.
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Using WebLink To Accept Electronic Check From Your Web Site
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Complete details on how to link your
web site to WebLink are provided in the section entitled "
WebLink HTML Help". Please review the Electronic check overview for a complete understanding
of when it is appropriate to accept Electronic checks from customers directly on
your web site.
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Using The Electronic Check Activity Menu
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The system provides excellent
reporting and Electronic check account management information to help you keep ahead
in your business. The Electronic check Activity Menu is actually very much like
an actual bank statement, where you see one statement for eElectronic check period
with a previous balance and ending balance for that period. However, unlike a bank
statement, there are links to more details right from the Electronic check statement,
and you can change the beginning and ending date of the statement in order to see
more or less information according to your needs.
A sample Electronic check Activity statement appears on the following page.
Whenever there is activity with your account, it is reported immediately on your
Electronic check statement. Your Electronic check statement is constantly being
updated by the system with current information pertaining to your Electronic
check account. The following activities are reported on the Electronic check Activity
statement:
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Submitted Items - (these are the items submitted to the system either by
you from Virtual Terminal or from your web site through WebLink. The total is the
amount that has been transferred from your customers' accounts into your
Electronic check account) You can click the link to view the individual transaction
details of the submitted items.
Returned Items - (such as insufficient funds and chargeback items) You can
click the link to view the individual transaction details of the returned items.
Funds transfer - (for funds that are being transferred from your
Electronic check account into your regular checking account)
Bank fees - (for miscellaneous fees associated with your Electronic
check account, such as returned item fees)
If you have questions about your Electronic check Activity statement and transactions
please contact technical support using the "Merchant Support" feature on the Merchant
Menu.
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How Do I Obtain An Electronic Check Account?
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Click on "APPLY" or
"INFO" above to get additional information or to obtain an account.
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