How Electronic Check Payments Process Work
The eCheck process done through Authorize.Net
1. A customer presents their bank account information for processing, specifically the ABA Routing number, and Bank Account number. This information can be given to the merchant verbally, in written format, or by electronic means over the Internet.
2. Using their bank account information, you submit an eCheck transaction via your website or the Virtual Terminal to Authorize.Net for processing. The information is encrypted and sent securely over the Internet to Authorize.Net payment servers.
3. Authorize.Net receives your electronic request and immediately credits your virtual eCheck account for the sum of all items submitted.
4. Authorize.Net requests an eCheck debit to customer’s checking account the following business day through the Automated Clearing House (ACH). Because there is still manual intervention by the bank, electronic checks are not considered “real-time”. Customer’s account is usually debited within 1-2 business days.
5. If funds in customer’s account are available, they are forwarded back to Authorize.Net through the ACH system. If funds in customer’s account are not available, the original debit is posted back to the merchant’s virtual eCheck account as a Returned Item, which Authorize.Net will notify you by e-mail. Some of the reasons for returned transactions include the following: insufficient funds, invalid account or routing number, closed or frozen account, etc. For each debit returned, regardless of reason, a $3 fee is assessed and posted as a debit entry to the merchant’s virtual eCheck account balance.
6. All submitted items are officially considered “collected” by Authorize.Net if by the 7th calendar day following the submitted date of the original debit the charge has not been reversed by the customer’s bank. Statistically, 95% of all returns occur during this 7 day period.
7. Once the eCheck transaction is considered “collected,” Authorize.Net transfers collected funds into your checking account every business day.
8. Although Authorize.Net has transferred collected funds to the merchant’s checking account, there still exists a 5% chance, that a bank may return a debit for one of the aforementioned reasons past the seven calendar day waiting period. To return an eCheck debit, a customer must sign a affidavit at their bank stating that neither they, nor any other authorized signer on the account authorized the debit in question. If the affidavit is signed within 60 days, the customer’s bank reverses the debit to Authorize.Net, who then posts the return to the merchant’s virtual eCheck account.