Electronic checks make it possible for people who may have no other payment option to purchase items and pay bills online. An e-check is the electronic equivalent of a paper check. It works in much the same way as a paper check, except that all processing takes place over the Internet. Offline brick-and-mortar businesses can also use the same process to convert an on-site paper check into an e-check.
You can finalize an Internet purchase or pay a bill online by supplying the following information:
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- Your name and contact information exactly as it appears on your bank account. For example, enter "Susan" if that's the name on your checking account even if you usually use the shortened version "Sue" or a nickname.
- The type of bank account if the merchant gives you the option to pay from either a checking account or a savings account
- The American Banking Association number, more commonly referred to as an ABA number or routing number for your bank. Look for this number on the bottom left side of a personalized paper check or deposit ticket
- The 10- to 12-digit bank account number listed on the bottom right side of a personalized paper check or deposit ticket
In-person e-check transactions work differently than online transactions. Instead of providing bank account information, you supply a personalized blank paper check, which the cashier will then run through an electronic scanner. The scanner records and transmits your bank account information and the payment amount, and compares the account number against any check verification services to which the merchant subscribes.
After payment approval, the cashier will void and return the paper check to you along with a receipt for you to sign and keep.
What Happens Next?
It typically takes two to four business days for an e-check to process and for the funds to be transferred out of your bank account. This is because electronic check processing takes place over the Federal Reserve Bank's Automated Clearing House Network -- the same as a paper check, except that it's faster.