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bp Electronic checks overview
bp What if the customer has "Insufficient Funds" (NSF)?
bp What about Electronic check chargebacks?
bp Electronic check transactions are NOT processed in real-time
bp Processing Electronic check transactions
bp Using Virtual Terminal to process Electronic check transactions
bp Using WebLink to accept Electronic checks from your web site
bp Using the Electronic check Activity Menu
bp How do I obtain an Electronic check account?

 Electronic Checks Overview

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)?

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?

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

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

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
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
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?
Click on "APPLY" or "INFO" above to get additional information or to obtain an account.

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