Electronic Check
What Is an Electronic Check?
An electronic check, or e-check, is a form of payment made by means of the Internet, or one more data network, intended to perform a similar function as a conventional paper check. Since the check is in an electronic format, it very well may be handled in less advances.
Furthermore, it has more security highlights than standard paper checks including authentication, public key cryptography, digital marks, and encryption, among others.
How an Electronic Check Works
An electronic check is part of the larger electronic banking field and part of a subset of transactions alluded to as electronic fund transfers (EFTs). This incorporates electronic checks as well as other computerized banking functions, for example, ATM withdrawals and deposits, debit card transactions and remote check depositing highlights. The transactions require the utilization of different computer and networking innovations to gain access to the applicable account data to perform the mentioned activities.
Electronic checks were developed in response to the transactions that emerged in the world of electronic commerce. Electronic checks can be utilized to make a payment for any transaction that a paper check can cover, and are represented by the very laws that apply to paper checks. This was the first form of Internet-based payment utilized by the U.S. Treasury for making large online payments.
The Benefits of Electronic Checks
Generally, the costs associated with giving an electronic check are strikingly lower than those associated with paper checks. In addition to the fact that there is no requirement for a physical paper check, which costs money to deliver, yet in addition electronic checks don't need physical postage in instances of payments being made to substances outside the direct reach of the entity giving the funds.
It is estimated that while a traditional check might cost as much as $1 to issue, an electronic check costs nearer to $0.10.
Electronic checks likewise accompany a lower risk of the associated funds being taken, as there is no unmistakable thing to block.
Further, there are various levels of authentication to assist with guaranteeing funds are directed appropriately.
Special Considerations
One of the more habitually utilized forms of the electronic check is the direct deposit system offered by numerous employers. It is an electronic method of sending a worker's wages directly into the representative's bank account. Furthermore, taxpayers who are owed a refund on federal tax returns can choose to receive a directly deposited electronic check from the Internal Revenue Service (IRS) rather than having a physical paper check sent through the mail.
Features
- One of the more every now and again utilized forms of the electronic check is the direct deposit system offered by numerous employers.
- Generally, the costs associated with giving an electronic check are quite lower than those associated with paper checks.
- An electronic check has more security highlights than standard paper checks.
- An electronic check is a form of payment made by means of the internet that is intended to perform a similar function as a conventional paper check.
