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I belong to a networking group and have been told multiple times my monthly dues need to be paid and I have to remember to bring a check. For those who refuse to adopt current forms of payment, there are ways that people can still pay by check but do so electronically. This process is called e-check and is facilitated by a process called ACH (Automated Clearing House).

ACH is only used in the United States and Puerto Rico. Similar systems exist in other countries but they have different names and run on separate networks.

Many articles say this is a safer way of taking checks because you don’t have to worry about looking for forged or counterfeit checks. But one thing I learned the hard way is, if you are a merchant and you are using the ACH process you may be in for a huge run around if you have a chargeback. An ACH chargeback does not occur in the same way that a credit card chargeback occurs. A merchant’s bank account can be debited as soon as the consumer reports to their bank that they did not authorize the transaction. The difference is the merchant will not receive a letter requesting proof of the transaction before, or after, the debit occurs. Instead, the merchant will have to dispute the charge with the customer’s issuing bank directly. You may find yourself spending hours on the phone between the gateway, merchant services provider and the customer’s bank.

Continue reading "ACH Processing: Replacing Check Writing?"