When businesses and customers use electronic check for payments, they should verify check to ensure that funds are truly available. Electronic check verification numbers and procedures are a few steps businesses should take in the eCommerce industry. Although verifying checks might be new to some business owners, it is a crucial step in the electronic check payment procedure. Additionally, businesses can conduct verify check online without complicated procedures. This article discusses the importance of verifying a check for an eCommerce website and ensuring that the senders’ accounts have ample funds.
What Is an Electronic Check?
Electronic checks or e-checks for short, replace standard paper checks. An electric check involves the electronic withdrawal of funds from the payer’s checking account, their transmission across the ACH network, and their deposit into the payee’s checking account.
Benefits of Electronic Checks
Electronic check verification numbers come with additional consumer protections to prevent fraud and are more secure than paper checks. Electronic checks are a dependable and durable payment method because of five key security factors:
· Digital Signature
A digital signature with a timestamp prevents fraud.
· Certificate Authorities
A certificate authority is a body that holds signs. It issues digital certificates, such as the popular SSL certificate, to verify the ownership of the public key used to encrypt data.
· Authentication
This step in the electronic verify check payment process aims to ensure that the consumer “consents” to giving over their money. Verifying the senders’ account information completes the authentication process. Authentication aims to prevent the submission or processing of fraudulent payment information.
· Encryption
This is a well-known cybersecurity technique for hiding critical information so that it can travel securely via a digital network. This information is useless to a malevolent third party if they get their hands on it since they won’t have the private keys to decrypt it. Every transaction, including electronic checks, is encrypted on the ACH network.
· Duplicate Detection
To prevent fraud, it is crucial to keep an eye out for any unusual activity or duplicate electronic check transactions.
Is it Important to Verify the check?
Before completing a transaction, organizations or individuals can use an electronic check verification method to verify check online that a customer’s checking account is legitimate. The account information is normally verified in a matter of seconds and can be used for in-person and online transactions. Verify check is crucial for preventing fraudulent activity involving paper and electronic checks.
How Does Check Verification Work?
Check verification is when a company performs its due diligence to ensure that a customer’s payment will be processed. There is frequently a few-day delay between the issuing and clearance of checks and electronic checks. During this window of time, scammers have the chance to finally walk away with the goods or services without paying for them. Let’s examine the procedure to verify checks and discuss how to identify check fraud.
1. Complete Authorization
The payer must have authorized the payee to charge them the sum in question. Typically, this is accomplished by signing a contract or completing an online form. This typically happens once when a payments processor processes an electronic check.
2. Information Entry
The payee inputs the appropriate data into the interface after authorization. Users can either enter their online bank login information or their checking bank routing and account number. It is okay to check this information once when using an online payment option, and creating a plan for recurring payments is simple. The electronic check verification phase then starts.
3. Verify Check Information
The account number and routing information submitted into the form must coincide with those the payer initially gave at the authorization step for the electronic check to clear successfully—this aids in figuring out whether the account is active and open. When using a processor for online payments, this occurs automatically. Businesses would have to perform it manually without one.
4. Evaluate Bank Balance
Like a paper check, an electronic check might bounce. The system must confirm that the payee’s account has enough money to cover the transaction. With most banks, this process typically takes 24 to 48 hours. On the other hand, Seamless Chex makes it happen instantaneously, saving firms a considerable amount of time. The transaction enters the system after completing the process of electronic check verification.
5. Payment Reflection
The deposit appears in the payee’s account once the transfer is finished. A confirmation is also sent by email and SMS to both parties.
With the correct payment partner, the entire electronic check verification and transfer procedure can take up to five days or be completed the next day.
Credit Card Vs. Electronic Checks
There is no functional distinction between these payment options on the surface. All of them are acceptable payment methods that people use to purchase products and services. Here, there is a substantial difference in how these payments are handled.
Credit card providers look after their payment system. These are exclusive networks for gathering all credit card user transactions. Due to their uniqueness, employing them carries higher costs.
However, because electronic checks use the far more popular ACH network, their processing costs are typically lower. The cost of using electronic checks can be as little as 10 per transaction, and they never suffer credit card interchange fees. This can result in significant savings for companies that process hundreds of thousands of transactions annually.
Reduce Risks to Verify Check
Cashing the check-in person at the writer’s bank is the safest way to guarantee that the business receives its money. This method only functions if businesses go to a bank branch where the cheque is written. If they bring the check to their bank, which is a different bank, they might offer cash right away. The money leaves that account immediately if businesses visit the bank where the funds are pulled.
It is best to wait to use the money for a few weeks after depositing (or cashing) the check at the bank unless businesses are certain it is valid. If the check bounces, they will reimburse their bank because they are accountable for all funds taken out of the account. The business can leave with cash thanks to the bank’s funds availability policy, but the check still needs to be validated.
Electronic Check Verification Services
If a company often accepts checks from clients, it is impractical to contact banks for each check. Automated services to verify checks can assist the business in determining if they are likely to get payment, but they only sometimes confirm current account balances. However, these services highlight accounts and individuals with a history of issuing faulty checks, which is valuable information. Some firms even promise to pay them if they don’t notify the business of a faulty check.
Reduce Hassles to Verify Check with Merchant Check Verification Services
Electronic check verification services are essential for businesses because they simplify their process. Businesses can take electronic checks and other payment types with little to no risk, thanks to extensive merchant accounts that include services to verify the check. The following are the advantages of a merchant account to verify checks:
- Simplified processing
- Low costs
- Quick response and processing times
Things to Check While Taking Electronic Checks
Businesses can identify a fake electronic check by performing simple detective work and requesting bank information.
- Keep an eye out for various security features, which are frequently included on the check’s reverse side. Evaluate each of those features.
- Keep an eye out for microprint, which could indicate that the check was printed by a reputable check printer rather than at the residence of a con artist.
- Keep an eye out for suspicious conduct, such as when someone demands cash in return for a check.
- Before accepting customer checks, businesses should establish guidelines to lessen the possibility of being taken advantage of.
Things to Know about Methods to Verify Check
Despite having additional information after confirming the money, businesses need to be assured that the check is valid. They might learn that there are enough funds in their account when they call the check writer. But what possibly can go wrong?
- The check writer has the right to remove money from the account before depositing the check.
- If a business deposits the check immediately after verifying it, it might take a few days for the money to post to the check writer’s account. Even if they use the mobile deposit app from their bank to deposit the check, it can still take a couple of days.
- The individual may provide the check using a stolen check or utilize information from a stolen checking account. The legitimate account holder may have sufficient funds, but once they realize a fraudulent transaction has struck their account, they can cancel the payment.
- Funds from the check writer’s account may be exhausted before the check is presented due to additional debits, withdrawals, or account holds.
Conclusion
The paper check is brought into the modern era by way of the electronic check. The electronic check system facilitates this for all parties involved compared to paper check deposits, which need a time-consuming back-and-forth procedure to authenticate and verify the check. This will only become more common in the digital world as customers may make payments more quickly, businesses get their money faster, and a large portion of bank validation is automated with these new processes.
