The Simpay Academy​

ACH and eCheck Best Practices for Retailers

ACH and eCheck are terms that are often used interchangeably, even by marketers. They do not mean the same thing, nor are they exactly the same thing. However, they do have some similarities and overlaps in their functions and mode of operation. Together, eChecks and ACH are forms of Electronic Fund Transfer (ETF).

ETF refers to online financial transactions involving the electronic transfer of money from one bank account to another. The similarity between eChecks and ACH is evident in the fact that both involve the electronic transfer of funds between bank accounts. Other than this, slight differences lace the intersection between both forms of payment processing.

As a business owner, you must understand the two, their applications, and how you can maximize both to boost your business.

What is ACH?

Automated Clearing House (ACH) is a fund transfer system that uses computer-based electronic networks to process direct payments between a merchant’s bank account and consumers’ bank accounts. ACH payments refer to transactions processed through a wireless network to facilitate direct fund transfers from one bank account to another or pull funds automatically from a checking account.

With ACH payments, wire transfers, credit cards, debit cards, checks, cash, etc., are not needed for payment processing. As a business owner, you can use ACH payment processes for recurring transactions such as employee payroll.

What is eCheck?

Electronic checks (eChecks) are digital variants of paper checks. eChecks function the same way as paper checks, with the main difference being that eChecks are processed faster, electronically. Depending on who you are talking with, they may refer to eCheck as an internet check, direct debit, eCheck ACH, or online check.

As an individual processing an eCheck payment, you can write and sign an eCheck, then transfer the eCheck via an electronic device to the payee. When a payer initiates an eCheck transaction, a direct debit will be made from the payer’s checking account and transferred directly into the payee’s checking account.

ACH is often the gateway network used in processing eChecks. Hence, business owners looking to utilize eCheck payments have to sign up for an ACH merchant account. The ACH network also makes it possible to process paper checks the same way as eChecks. Simpay eCheck features allow users to process checks fast and securely over an ACH network.

What are the Differences Between ACH and eCheck

Following the narrations above, it is easy to see why people use both terms interchangeably. The differences between both forms of payment lie in their operations. Truthfully, they are so synonymous it is almost hard to extract the differences between them. However, differences still exist, and knowing them could help you navigate both more easily.

Let’s take a look at some of the differences.


Check Clearing for the 21st Century Act, known as Check 21, is the federal law guiding the use and process of eCheck payments by banks and business owners. If you are using electronic checking features in your business, then your business is, by default, subject to Check 21.

On the other hand, the use of ACH requires that business owners comply with policies set by the National Automated Clearing House Association for business owners. Merchants may circumvent this compliance in the case of eChecks.

Transaction Procedures

ACH is a form of payment and also a payment process. It provides a funds transfer system and gateway that enables various online transactions. eCheck is simply a form of payment usually processed via an ACH network.
Additionally, ACH does not simulate paper check transactions.

Parties Involved

ACH payments are often managed by a specific entity – a payment processor or a bank that uses submitted information to process automatic recurring payments or single payments.

On the other hand, eChecks often involve inputs from the payer and payee during the transaction process. The payer signs the eCheck, and the payee endorses it.

ACH and eCheck Best Practices for Retailers

Accepting eCheck and ACH payments opens the door to a broader range of customers. These forms of payment are very convenient for customers and business owners as they allow for more secure transactions and faster processing time.
There are a few industry best practices to take note of and apply in your business to maximize the values of these forms of payments.


If you have a small business that mostly offers over-the-counter services and you pay your employees cash, then ACH and eCheck payments may not be for you. They may even cause a lag in your business flow. Essentially, it is best to avoid these payment methods and stick to credit cards and other point of sale solutions suitable for such businesses. However, if your business primarily offers point of sale but experiences significant traffic, then it could be reasonable to acquire a check scanner for eChecks.

If you are operating or looking to operate an online business, subscription-based business, or a business that handles large payments, then ACH and eChecks should be your go-to payment processing option.

ACH and eChecks make it easier for retailers to process auto-renewals, autopay, and other forms of recurring payments – irrespective of business type.

Legal Obligations

You must understand the fine prints and key points of policies, laws, and governing bodies guiding the utilization of these payment methods. In this case, you should take note of Regulation E, Check 21, and National Automated Clearing House Association compliance.

These regulations help protect your interests and those of your customers. Where applicable, a thorough understanding of these regulations can help you resolve issues fast and avoid unnecessary risks that may be detrimental to you and your customers. If you are using these payment methods but do not understand the legal intricacies involved, Simpay can help review your business processes and help you comply while keeping you abreast of changes in policies.


Your business flow should become smoother, faster, and more coordinated when you incorporate ACH and eChecks into your business structure. But how easy it becomes depends on the processing software and hardware you use and the means with which they integrate and sync with the existing structure.

The first thing to note is, you don’t have to spend a lot of money on hardware or software services before you can get the best of ACH and eChecks., You can still end up with unnecessary lags, double debits, frequent network errors, software or hardware incompatibility, etc.

Simpay’s ACH and eCheck features are designed for easy integration with existing business structures and flows. They are equipped with an extra layer of coding to ensure network stability and significantly minimize chances of network errors and transaction failures that may occur as a result.


Still building on convenience, your customers need to feel safe with their personal banking details in your hands. Additionally, you need to be able to detect unauthorized eCheck payments. In the absence of security, transactions could become less convenient for you and your customers. Your data or your customers’ data may also get stolen, causing customers to lose trust in your business.

Hence, it is always best to protect your customer’s data from the onset by using Simpay ACH and eCheck hardware and software that provide industry-standard security. Simpay’s ACH and eCheck features are run by strict encryption algorithms that block listening devices and trackers from stealing processed data.

Also, the Simpay ACH payment processor features duplicate detection, which allows you to monitor duplicate eCheck transactions and other suspicious or fraudulent activities.

Partner with the Right Payment Processors

As a business owner, you need a reliable financial institution, a payment processor, and a payment gateway to accept and operate eCheck transactions. Your payment processor’s hardware or software provisions have a lot to do in the business-centric and customer-facing aspects of your daily business operations.

With Simpay as your partner and payment processor of choice, you can have the best of both worlds – ACH and eCheck payments. Aside from the extra layers of security, smooth operability, and easy integrations that our solutions provide, you are also certain of getting industry-standard services at competitive price swith no hidden fees or overcharge.

We have a team always ready to make the fine prints of finance industry policies easy to understand. . Partner with us today, and reap the full benefits of the payment processing industry while boosting your bottom line!

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