Echecks Reduce Risk for High Ticket Sales

Echecks Reduce Risk for High Ticket Sales

Increased Demand for High Ticket Products

The term “high-ticket” is used to designate an wide categories of products that have one feature in common: they are expensive. Examples of high ticket items include luxury items, such as designer clothing & jewelry, collectibles, electronics, furniture and home appliances.

In recent years, customer demand for high ticket items has soared.  Shoppers expect to buy expensive items as quickly and easily online in the same way that lower ticket items are purchased.  

Risk of Fraud for High Ticket Sales

Two words best describe the sales of high-ticket items.  Profitable and risky.  

Merchants selling expensive items are classified as high risk merchant accounts by payment processors.

Expensive products are equally attractive to both legitimate consumers and fraudsters.   But cyber-criminals find high ticket items extremely profitable from a cost-benefit perspective.  

Electronics, jewelry, and collectibles can quickly and easily be resold before merchants are even aware that the transactions are fraudulent.   By the time you have notification of fraud (usually because the legitimate owner of the card charges back the transaction), your losses can be dramatic.  

The banks & payment processors also take a big hit.  If you are unable to cover the losses for the fraudulent transactions, the banks & processors are obligated to do so.  

One of best ways to mitigate risk on high ticket item sales is to promote echecks as the preferred payment option at checkout.  

What is an Echeck?

An echeck electronically debits funds from buyers’ bank accounts.  And automatically deposits the funds to your business bank account.

There are two ways of processing echecks.  An ACH merchant account uses the ACH Network to process the orders.  A Check21 merchant account uses bank-t0-bank image transfer instead of the ACH Network.

From a user perspective, both Check 21 and ACH merchant accounts operate in the same way.  The buyer provides banking routing & account information at checkout and the payment is authorized.  The decision on which method of processing to use depends on the specifics of your business.

Fraud Risk Echecks vs. Cards

While the preference of consumers for echeck payments has increased, this cannot be said about fraudsters who continue to rely on cards for the majority of their illicit activities.

The most recent Federal Reserve Payments Study compares the fraud rate of the two payment methods. It concludes that, in terms of value, cards have a fraud rate of 8.27 basis points. This means that for every $10,000 spent, $84.27 were lost because of fraud.

Echeck payments have a considerable lower fraud rate of just 0.24 basis points.   This means that for every $10,000 spent, $2.40 would be lost due to fraud.

Of course, as the payment landscape changes, these figures may be change.  But at this time, echecks payments are have far fewer risks of loss to you due to fraudulent transactions than do card payments.  


In additon to reducing risk from fraudulent transactions, echecks offer many other advantages to you.

  • Echeck / ACH merchant accounts are easier to obtain than card accounts for high ticket sales
  • The more ways customers have to pay you, the more sales you will make.  Adding echecks at checkout gets you more orders from buyers that don’t have cards, are maxed out on cards, or who simply prefer to pay through a direct debit from a bank account.
  • Payment processing fees for echecks are lower than cards, saving you money.
  • Echecks give you a competitive edge.  More than 30% of internet merchants offer the payment option.  If you don’t, you risk losing sales to your competitors who do.

Do you want to increase sales while decreasing risk?

Contact today

Role of eChecks in a Digital World

E Checks Still Relevant in Digital Age

Echecks based on Check 21 technology is frequently seen as an alternative to card and ACH payments, but how exactly did it come into existence, and most importantly, what is the place of this payment method in an increasingly digital world?

Some History on Check 21

The beginnings of Check 21 date back to 2003 when the Check Clearing for the 21st Century Act was passed, allowing for the creation of a digital version of a paper check.  Once the digital version is created, these is no need to deal with it in physical form, which means that the process is simplified considerably. An individual can use any kind of device, such as a scanner, camera, or mobile phone, to create the image. An essential characteristic of Check 21 is that it does not abide by the rules and fees of NACHA, the organization that handles ACH payments.

The main technique behind the digitization of Check 21 is called “truncation”. This means that both sides of the check are scanned and used as such, but they can be printed on a special type of document, if this version is still needed. Since 2003, however, Check 21 has become so common that most banks have the technology to process them solely based on the electronic format.

The gradual introduction of Check 21 means that banks and customers will deal less with paper, but is this enough to sustain the popularity of this payment method? While innovations such as Virtual Check 21 makes the process smoother and decreases the charge-back rate and the not sufficient funds rate, the answer to the previous question is no.

According to a study carried out at the end of 2014 by Celent, a prestigious research and consulting firm specialized in tech and finance, the number of Check 21 paper transactions is expected to decline from 22.4 billion items in 2010 to around 8.7 billion in the not so distant future – 2017. This means that as the volume of checks will decrease, the cost per item will increase, thus making this payment method even less competitive on the market.

Check 21, however, will not disappear overnight, at least not in the US. Currently, about 60% percent of checks originate from the US, claims Celent, so the trend is expected to be less steep compared to what will happen in other markets. It remains to be seen how consumers will react to the imminent fall into disuse of paper in financial transactions and whether they will agree to switch to faster, more efficient methods of payment.


Irrespective of what the future might bring, right now many customers expect to see echecks as one of the payment methods listed on a your website.

And since a large variety of payment methods contributes to better conversion, electronic check processing can be nothing but beneficial to your business. 

Do you want to accept echecks?


Capture More Sales: Accept Checks Online

E Checks for More Sales

Offering electronic checks (echecks) as a payment option gives you an easy way to increase sales.  The more ways customers have to pay you, the more orders you will receive.  

Echecks electronically debit payments from customer’s bank accounts and automatically deposit the funds into the merchant’s bank.  Electronic checks are safe, secure and convenient payment method that lift sales up to 20%.

Echecks let you accept payments from customers that do not have cards, are maxed out on cards or who simply prefer to pay with an electronic check. The fast growth of internet bill payment has built a strong trust in the echeck payment method.  These days, customers expect to be able to pay online with an echeck for all types of goods and services.

Yet, despite the growth of online check transactions, more than half of internet retailers still do not offer the payment option at checkout.  If you do not accept echecks, you are giving away your profits to your competitors that do.

Let’s face it.  There’s endless competition on the internet for customers.  Your competition is only a click away.  Don’t risk losing a customer because you don’t accept electronic checks as a payment option on your checkout page.

Echecks for High Risk Merchants

Echecks are particularly valuable for high risk merchants.  Processing rates are substantially lower than rates for cards, saving money on operating expenses.

Establishing a Check 21 or ACH merchant account is easier than setting up a card merchant account.  Accounts are approved and ready to go quickly.

Payments made with electronic checks create a more stable cash flow for high risk merchants with recurring or subscription billing models.   Customers rarely change bank accounts.  Revenues flow on a continual basis without the need to update information.

Compare this with card processing.  Each year, one in five cards is reissued due to data breaches, expired cards, or other issues.  Merchants then must update card information or recurring payments are jeopardized.


It’s common sense.  The more ways shoppers can pay you, the more sales you make. 

Electronic checks are the most trusted alternative payment method. Millions of American shoppers regularly pay for goods and services with an echeck.

Accept checks online. Accept check by phone, mail and fax orders. Convenient for buyers. Profitable for you.

Do you want to increase sales and profits with echeck processing?

Contact today.

E Checks for High Risk Merchants

E Checks Increase Sales

Are you a high risk merchant who wants to accept check online accept check by phone orders?  Electronic checks are the most popular alternative payment method for US shoppers.  

With echecks you capture more more sales from buyers who don’t have cards or are maxed out on cards. And get orders from shoppers who prefer to pay you with an echeck rather than a card. 

Electronic check processor accounts give high risk merchants an effective alternative to ACH payments.  

5 Reasons High Risk Merchants Chose Electronic Checks

Account Approval.  Many high risk merchants do not qualify for an ACH processing account. Yet, echeck processors welcome high risk merchants.  

 Chargebacks.   ACH rules require businesses to keep chargebacks at less than 0.5%.  This is not feasible for high risk processing.    Echecks based on Check 21 technolgy  is a better option.  Echeck transactions are governed by check laws, and the Uniform Commercial Code, rather than ACH regulations.  As a result, you have far greater flexibility on chargebacks and returns.  

Expand Your Customer Base.  Electronic check processors can debit from accounts at institutions that do not participate in the ACH network such as credit unions, savings & loans, small banks, brokerages, and checks drawn on credit card accounts.  This means your customers have more options to pay you.

Reduce Fraud.  ACH processing requires consumer accounts to be credited back immediately if the consumer revokes a transaction.   Electronic check processing does not have this requirement, giving you more flexibility in dealing with revoked transactions.

Better Descriptors.  E check transactions appear on consumers’ bank statement in the same place as a paper check transactions, making it easy for buyers to remember the purchase and reducing the risk of chargebacks.


Over 30% of internet and telephone transactions are paid with electronic checks. If you do not accept checks online or accept check by phone orders, you risk losing business to your competitors that do.  

Are you a high risk merchant interested in increasing sales and profits with an echeck account?




High Risk eCheck Merchant Accounts

Merchants that offer customers multiple ways to pay increase orders.  It’s only common sense.  The more payment options you provide to shoppers, the more sales you will make. After cards, echecks are the most popular to way to pay online. Close to 30% of online merchants already offer echecks on the payment page. At checkout, the buyer clicks “pay with echeck”.  The transactions are processed through the Federal Reserve bank and settlement of funds is made to the merchant’s bank account.



High Risk Merchants

Merchants in high risk categories find it easier to establish an echeck account than one for card processing.  Echeck merchant accounts have fewer industry restrictions than do merchant accounts where the card brands wield an inordinate amount of control and power.

Merchants in all types of industries can obtain echeck processing accounts.  Travel, electronics, financial services, collections agencies, online pharmacies, adult entertainment, payday loans, and ecommerce merchants selling any type of goods or service can be approved for accounts.

How Electronic Checks are Processed

There are two technologies that are used to process echeck transactions.  One is ACH processing; the second is Check 21.  Both clear transactions through the Federal Reserve.

The choice of which technology to use depends upon the projected numbers of returns and chargebacks associated with an account. The ACH network is guided by NACHA regulations.  Chargebacks (also known as “revoked transactions”) must be kept under 0.5% for ACH processing.  Returns rates must be kept under 15%.

High Risk Merchants Prefer Echecks

Many high risk merchants find restrictions of ACH echeck processing very challenging. Few can keep chargebacks & returns within the parameters set by NACHA.

If you chargeebacks in excess of 0.5%, Check 21 echecks are a better option.  Check 21 is governed by check law and the Uniform Commercial Code, not the NACHA. 

As a result, Check 21 electronic check processors allow far greater latitude on returns and chargebacks. Although rates for Check 21 processing are higher than for ACH high risk accounts, the greater flexibility allowed by  Check 21 processing more than compensates for the rates.

In addition, international merchants that want to capture more sales from US buyers can establish Check 21 processing accounts.  ACH processing requires a US depository account in order to establish an account.  Check 21 processing is available for international merchants that do not have US depository accounts.  Settlement funds can be wired to international bank accounts.


Accept checks online. Accept check by phone, mail & fax orders.  The more ways customers can pay you, the more sales you make.

Electronic checks are the the most popular alternative payment method for US shoppers. Millions of Americans pay for goods & services online with an echeck.

If you don’t accept echecks, you risk losing sales to your competitors who do.

Are you interested in increasing sales and profits with an echeck account?

Contact today


Debt Collection eCheck Merchant Accounts

Electronic Checks for Collection

Debt collection agencies, credit counseling and repair services, bankruptcy attorneys as well as other industries in working with financially challenged clients find echecks are one of the best payment processing options.

These types of companies establish echeck accounts, using either ACH or Check 21 processing.  The choice of which technology to use is based on the anticipated number chargebacks and returned transactions.

Debt Collection Industry

The US Bureau of Labor Statistics projects that debt collection will experience a 23% growth rate by 2016. Debt collection companies are growing because more consumers are falling behind on their bills.

In addition, new technology makes it profitable for smaller companies to get into the business. And it is a profitiable business, indeed.  According to Smart Money Magazine,  profits generated by debt collection agencies keep as profits on average 25% of the collected debt.

Reasons Debt Collection Classified as High Risk Accounts

Debt collection is considered a high risk merchant account because, obviously, many debtors do not have funds to pay money owed.  When the amount is due, debtors often do not have the money in bank account to cover the payments, creating high return rates.

Further, some debtors know how to “game the system”.  They deny that the payment was authorized and initiate a chargeback of the payment with their bank.

The Fair Debt Collection Practices Act is a federal law which regulates third-party collection agencies and protects consumers from unfair and abusive collection practices. Consumer advocates want to amend the Act in order to provide consumers with even more protections when they are contacted by debt collectors.

Increasingly, law suits are being filed against collection agencies alleging unfair collection processes.  And the Federal Trade Commission reports more complaints are received about debt collectors than any other industry.


Accept checks online. Accept check by phone, mail & fax payments. The more ways debtors can pay you, the more money you can collect.

Most debt collection agencies use Check 21 electronic check processing because there is greater flexibility in terms of chargebacks and returned transactions.

ACH processing requires chargebacks stay under 0.5%.  Check 21 electronic check processors do not have this limitation.  And Check 21 processing allows for higher return rates than ACH accounts.

Debit card processing is also available for debt collectors who processing high volumes of transactions.

Are you interested in payment processing for your debt collection agency?

Contact today