Posted by NationalACH on Aug 19, 2020
eCheck Merchant Accounts

The Problem of Transaction Reversal

One of the primary promises a good high-risk merchant account provider should make to its high-risk merchant clientele is to strongly protect against or reduce chargebacks and revoked transactions.  Chargebacks and revokes result in the reversal of transactions for the return of funds due to customer dispute, or an otherwise invalidated transaction.  They are expensive and risk the ability of a high-risk merchant to do business.

Chargebacks and revokes cost high-risk merchants not just the money lost to goods and/or services delivered, but put high-risk merchant account at risk of having their merchant accounts shut down.  The threshold for permitted chargebacks by most card brands is very low; for ACH, even lower. This means the threat that chargebacks and ACH revokes present to high-risk merchant is real. 

The likely occurrence of customer dispute is usually in the initial transactions. Even with automatic billing for those customers promising to do long-term business with high-risk merchants, the risk of transaction reversal is in the beginning stages of the client relationship.  It is incumbent upon a good high-risk merchant server to truly understand this, and to have systems in place to sense the signs of potential for invalidated transactions. A good high-risk merchant server should act like a partner to facilitate the business of its high-risk merchant client by,

  • Providing fraud detection and chargeback prevention
  • Provide services that improve opportunity for profit
  • Facilitate business growth
  • Reduce fees and administrative costs inherent to high-risk merchants so that high-risk merchants can keep more of what they earn.

Echecks: A Simple Solution

Echecks are a strong solution with added benefits, to the problems chargebacks and ACH revokes create. Not only do Echecks provide yet another reliable method of electronic payment to the high-risk merchant’s client base, they are a great alternative to high-risk merchants who are not eligible for ACH and card accounts.  They work like a check but act like a credit card in the speed of payment, but Echecks cannot be reversed like a credit card payment can be.

The Echeck is an electronic version of a paper check with a much faster, almost immediate processing time.   Echeck feature comes with automatic verification of the check writer’s account content and legitimacy. This helps a high-risk merchant to vet their clients. Echeck draws from the check issuer’s account and deposits into the high-risk merchant’s account upon check verification. This means Echecks can detect whether a check is “good” or not, and processes accordingly.  Echeck prevents a bad transaction from going through before goods and services are delivered.

Once the validated Echeck is cleared, the transaction cannot be reversed simply by dispute. And, because Echecks are regulated by banks in the way checks are, time to dispute the transaction is extremely narrow once the Echeck clears, which is happens quickly..  Thus, Echeck prevents a loss before it occurs and the high-risk merchant is paid for goods and services.  Echecks have all the immediacy of payment in a credit card, and more protections. 

The Added Benefits of Echecks

Photo of plants growing from soil heaps with BENEFITS conceptual words written on paper cards

By offering an additional method of electronic payment, Echecks can facilitate business growth.  More options, fewer limits mean more business.

While banks impose caps on bank card and ACH transactions per day, not so for Echecks.  Again, since Echecks are treated by banks like checks, there are no limits to the number that a high-risk merchant can process.  Echecks lift limits for high-risk merchants which also high-volume merchants, at a lower transactional cost. 

Echecks are good for the high-risk merchant’s clientele as well.  Anyone with a checking account can do business with high-risk merchants with electronic convenience to both the client and the high-risk merchant, while the high-risk merchant is protected by Echeck against loss of business because Echeck makes sure the payment is good.

Interested in finding our more about how echecks can help your business?  Contact  Or call 866-ACH-7600 today.