How Electronic Check Processing Works

Electronic check processing is the means by which you can take a customer’s routing number and account number (the numbers imprinted at the bottom of a paper check) and submit it for payment electronically , typically using an online interface, instead of accepting a paper check and taking it to the bank. PaySimple provides an easy electronic check (or eCheck ) processing feature that requires no expensive scanners or other hardware -- you simply key in check bank account information and submit the transaction.

The process is simple:

1. Authorize
You must notify your customers that their paper checks will be processed electronicallyget permission from your customer to debit an echeck transaction from his or her bank account. You can do this in writing on your invoicesget this permission in writing, over the phone (if the conversation is recorded), or online via a terms and conditions checkbox on your web payment formor you can post a sign with this information at your place of business. (PaySimple provides you with a sign for your business and a sample of proper notification text for your invoices ). With PaySimple, you can even set up recurring schedules to debit the customer’s bank account. In this scenario, be sure that your authorization covers the agreed upon scheduled dates and amounts. For assistance with electronic check payment authorization, see our electronic check Authorizations Guide.

2. Enter the Transaction Information
Once authorization is received, you’ll need to collect the proper information to enter the transaction into the online interface. Similar to the information contained on a paper check, you’ll need to get the name of the bank, bank routing number, accounting number, and account type (savings or checking).

3. Process
Once you click "Process," an ACH file is created and presented to your financial institution; the payments are processed through the ACH network, the customer's account is debited, and your account is credited. (PaySimple does this for you and provides an easy reporting screen that tells you the status of all transactions.)

4. Confirm.
Once your customer's account is electronically debited, the payment is listed on his or her bank account statement under "other electronic payments" or a similarly labeled area. The description will include the check number, amount, and the billing company name. (PaySimple even lets you send your customer an automatic receipt for the transaction)

See the system or call 800.466.0992 to ask us any questions