Posted by NationalACH on Apr 23, 2010

Alternative Payments for Ecommerce

For internet merchants, alternative payment methods are all the rage.  Alternative payments give consumers another way to purchase goods and services from your site.

Payment processing fees for alternative payments such as electronic checks processing options are often significantly lower than credit card rates. Save money on processing while boosting sales.

Accept Checks Online 

Electronic checks or echecks are the fastest growing alternative payment method chosen by merchants.  Merchants that accept checks online increase sales up to 29%.

At checkout, buyers enter bank routing and account number rather than credit card information.  The money is debited from the buyers ' bank accounts. Funds are electronically deposited in your bank account. a the ACH network.  Merchants receive settlement in 3-5 business days.

Pros & Cons of Echecks

The main downside associated with echecks is that transactions are not processed in real time. Rather, electronic check transactions clear through the Federal Reserve at midnight. Therefore, there's a small risk that for a bounced check.

Most times, returned items are not the result of fraud. Instead, they result from poor planning on the part of a consumer.  For instance, a buyer may expect a check to clear on a certain date but it does not. 

In the physical world, merchants can get check guarantee to mitigate potential loss from check transactions.  If the check bounces, the merchant is still paid.  It is the responsibility of the check guarantee company to recover the money from the consumer who bounced the check.

In the ecommerce world, very few check guarantee options are available.  The largest ecommerce merchants can afford to self-insure against loss.  Smaller merchants can not.  Even if a merchant can find check guarantee for internet purchase, the guarantees will be expensive.

The upside for the vast majority of ecommerce merchants is that bounced checks account for less than 1% of all the electronic checks. 

The increase in sales that you realize when you accept checks online far outweigh the risk of not accepting electronic checks.  


Electronic checks are regularly used by millions of of US shoppers to make purchases online. More than 30% of internet sites offer checks at checkout.

If you don't accept checks online, you risk losing sales to your competitors that do.

Interested in an echeck account to increase orders while decreasing payment processing expense?