Echecks and Automated Clearing House Network

Echeck processing will not be complete if not for the Automated Clearing House network or ACH. All echecks are cleared through the ACH network. Before, only a limited number of organizations including banks are allowed to access the ACH network but recently, it has opened its doors to banks, as they became the only institution that offered echeck services. However, since the popularity of the Internet has increased over the years, this has changed. Today, there are now third party merchants, alongside a bank, who provide echeck services.

The Automated Clearing House network is a secure and private system that connects banks to one another through the Federal Reserve Board or other ACH operators. The ACH processes large volumes of credit and debit transactions including the following: direct deposit of payroll, social security and other government benefits, and tax refunds; direct payment of consumer bills; business-to-business payments; echeck; eCommerce payments and federal; state and local tax payments.

Echecks can refer to several types of electronic transactions. These can range from ACH-based electronic check electronic network echeck, internet or telephone-initiated payments and catch. Features of echeck enable a bank elec payment solution suitable for all bank customers. Likewise, it provides banks an additional choice of payment that they can offer to their customers.