In today’s digital age of payments there have never been so many payment options for business owners. Whether it’s cash, checks, credit cards, or bitcoins, you have a plethora of options. Despite this, plastic still rules the pack. The 2016 Federal Reserve Payments Study found that credit cards account for more than two-thirds of all core noncash payments in the United States.

The study also found another interesting fact. From 2012 to 2015 ACH payments grew at an annual rate of 4.9 percent.

While it’s not surprising why credit cards remain so popular, what’s the reason behind this steady growth in ACH usage?

One of the main reasons is that they reduce payment processing costs.

How are eCheck transactions different than credit and debit card transactions?

When you process an eCheck, you’re probably going through the ACH network. This means that you’re bypassing credit card networks. As a result, you’re not responsible for paying interchange and assessment fees.

Even though a debit card is drawing money from a bank account, it still uses the same network that credit cards do. This means that you’re still charged those pricey interchange and assessment fees.

So, let’s say you had $20,000 in total sales. You’re charged a 2.9 percent fee, plus a fixed fee of $0.30. You’ll end-up paying $700 in fees.

If you accepted eChecks, you would be charged a zero percent fee and a $0.25 fixed fee. That comes out to just a hundred bucks. That’s $600 you don’t have to pay in fees.

Furthermore, you don’t have to pay deposit fees and it requires less manpower to process.

Ultimately, QuickBooks says that eChecks can reduce processing costs by up to 60 percent.

How much does it cost to process eChecks?

The cost to process an eCheck depends on the processing company.

In general, most companies charge a flat rate. This can range anywhere from zero percent to just one percent. If you are charged a fee, the average cost is only between $0.25 to $1.50. However, businesses that process large transactions should opt for the per-transaction fee since that’s usually the cheaper option.

There are some companies that may also charge you a monthly fee. Make sure that you do your homework in advance to find a company that doesn’t charge any additional fees.

Do eChecks have any other benefits?

Yep. There are definitely additional benefits to processing eChecks.

Besides saving you money, funds are available quickly. In fact, there’s now same-day AHC. So if a payment was submitted before 10:30 A.M., it will be available by 1:00 P.M.

Additionally, accepting eChecks can increase your sales, while decreasing errors and fraud. That’s because eChecks relies on the latest information protection features. This includes duplicate detection, authentication through digital signatures and public key cryptography, and encryption.

As if that weren’t enough, eChecks are better for the environment. That’s because it reduces the over 67 million gallons of fuel used and 3.6 million tons of greenhouse gas emissions created by transporting paper checks.

How can I get started with eChecks?

If you’re ready to start accepting eChecks so that you can reap from the rewards, here’s some pointers to get you going.

  • Work with a reputable and well-established company like Due or Dwolla. Even if another company promises a cheaper rate, a reliable processor is a must.
  • Start notifying your customers. It’s actually required by federal law to let you customers know about the change. They’ll also need a takeaway copy, as well as number for more information.
  • Find a processor that integrates with your existing business software. This will streamline processes like exporting customer data.
  • Having all relevant information on-hand. To sign-up for an ACH merchant account, you’ll need the following information; Federal Tax ID, years in business, and estimated processing volumes.
  • If you’re processing checking account payments via ACH, you’ll need either a check scanner, virtual terminal, or a website payment system like Due or Dwolla.

If you want to learn more about eChecks, then checkout our Ultimate Guide to eChecks.