ACH and Electronic Check Drafting
Check Drafting Features
Check Drafting is en electronic system that allows a business to accept check payments from their customers quickly, securely, and at a cost that is below any other method. The check drafting system is not the same as the ACH (Automated Clearing House) system, and is superior in many ways. Electronic check drafting is done online through a secure website, or can be integrated into an existing website using an API (Application Program Interface).
What it will do for you:
Depending on the service, an electronic check service can verify that the check writer does not have a history of writing bad check, or you can opt for a full electronic conversion program, where your checks are converted into an electronic transaction like a credit card. We also have a check drafting service that can be integrated with a website allowing you to accept checks from your customers over the internet.
Benefits:
- Checks are automatically deposited into a business's bank account.
- A business never has to see, touch, or deposit a single check.
- Checks are processed instantly in real-time.
- A Full featured, secure virtual terminal is included for manually processing checks.
- Advanced API integration is available for websites.
Who can use it:
Check drafting is available to just about any type of business, no matter how large or what products are being sold. Unlike echeck and ACH systems, the business requirements are much less stringent for check drafting.
The Cost:
Bank Drafting costs less than any other form of electronic check acceptance and normally less than accepting credit cards. With no setup fee and a cost of only $10 per month, check drafting is priced substantially lower than any other electronic check program available.
Check Drafting vs. ACH
ACH - To create an ACH chargeback, customers need only to ask the bank to reverse the ACH. An ACH can be reversed up to 180 days from the settlement date, just like a credit card transaction. This gives a customer the ability to change their mind or claim they never authorized the sale. Even if you can substantiate that they did authorize the sale, the money has already been returned to the customer and you in all likelihood will never recoup your losses.
Check Drafting - Check drafts do not fall under the same NACHA rules and regulations. To create a chargeback for a check draft:
- A customer must go to their bank and fill out an affidavit to claim that the draft was a fraudulent transaction. The customer has 30 days from the time they receive their statement to do this.
- The customer's bank then requests that the processor explain their position (why the customer was billed).
- When the processor authenticates that the customer authorized the draft, the bank will not allow the chargeback and the merchant will not be penalized.
The advantage of Check Drafting over ACH is that check drafting allows you the option of refunding the money. The money stays in your account until the issue is resolved, unlike an ACH where the money is automatically returned to the customer or frozen. You create goodwill with your customers because you are able to address these issues, as they occur, placing you in a proactive position instead of the reactionary situation that is created with the ACH system.
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