eChecks or Credit Cards?
Payment acceptance in the B2B space gives businesses several options to choose from. Two of today’s most popular payment methods are eChecks and credit cards. While credit cards have been the most commonly used as a go-to payment method for many years, eCheck payments have been gaining popularity in recent years – a result of the numerous benefits they can offer over credit card payments. However, credit cards offer many benefits to businesses as well.
In this blog, we compare and contrast the benefits of eChecks and credit cards.
The Case for eChecks
Before we dive into the benefits of eChecks, let’s first answer the questions, “What are eChecks” and “How do eChecks work?”
eChecks, or electronic checks, are a digital version of traditional paper checks. Echeck payments work by transferring funds from one bank account to another electronically. The process is similar to paper checks, but instead of physically writing and mailing a check, the information is entered online or through a mobile device.
Below, explore some of the B2B benefits of eCheck payment over credit card payment acceptance.
Lower Processing Fees
One of the biggest advantages of e-check payments over credit card payments is lower processing fees. While credit card processing fees can range from 2-3%, eCheck processing fees are typically much lower, offering up to a 75% + savings. For businesses that process a large volume of payments, these savings can add up quickly, making a significant difference to the company’s bottom line.
Chargebacks are a common issue for businesses that accept credit card payments. They occur when a customer disputes a charge and requests a refund from their credit card company. Chargebacks can be time-consuming and costly for businesses as they often require significant resources to resolve. With eCheck payments, chargebacks are much less common because the process for disputing an e-check payment is more complicated and requires more effort from the customer.
Faster Payment Processing
How long does an eCheck take to process? eCheck payments are typically processed much faster than credit card payments. While credit card payments may take several days to clear, eCheck payments are usually processed within 24-48 hours. Simply put, if businesses receive their funds faster the improvement to their cash flow can be huge.
The Security Edge
While credit card payments can be subject to fraud and chargebacks, eCheck payments are less vulnerable to these issues. eChecks are processed through the same Automated Clearing House (ACH) network as paper checks, which is a secure and reliable system; designed to avert fraud and to ensure that payments are processed accurately.
The Case for Credit Cards
On the other hand, credit cards offer a number of advantages to businesses as well. They are widely accepted and can be used to make purchases online and even internationally. Credit cards also offer rewards programs, such as cashback or travel points, which can be attractive to consumers who want to earn benefits for their spending. Plus, credit cards are generally a more widely used payment method than eChecks.
Below, explore some of the B2B benefits of credit card payments over eChecks.
Increased Sales and Revenue
Many consumers prefer using credit cards due to the convenience they offer. Accepting credit card payments can attract more customers and encourage them to make purchases, thereby increasing sales. Additionally, credit cards make it easy for customers to make impulse purchases, contributing to higher transaction volumes.
Credit cards facilitate online transactions, allowing businesses to reach a global customer base and participate in the growing e-commerce market.
Security for Customers
Credit cards often come with built-in fraud protection measures. The security involves multiple layers of protection, including features like CVV, EMV chip technology, tokenization, and encryption. This can make customers feel more secure when making purchases, leading to increased trust in your business.
Convenience for Business Operations
Credit card transactions can be processed quickly and efficiently, helping to streamline business operations and reduce waiting times for customers. Plus, many modern payment systems integrate with an accounting software such as eTreem, which automates the reconciliation process and reduces manual workload.
eTreem Can Help With Both Credit Card and eCheck Payment Processing
By working with an intelligent B2B platform like eTreem, your organization can utilize both eCheck payments and credit cards and realize savings right to your bottom line. Whether your customers prefer to pay with credit card or pay with eCheck, we can make your payment processing better. Contact us to find out how.