eCheck & ACH: What are their similarities

For people who aren’t deeply involved in banking or the payment technology industry, the terms eCheck and ACH can be indistinguishable from each other and are often used interchangeably. However, while these payment methods can have similarities, it is very important for business owners to know the differences between them.

It should be known that ACH (automated clearing house) and eCheck payments both fall under the term EFTs (electronic funds transfers), which are exactly what the name implies: funds being transferred electronically from one party to another.

DIFFERENCES

The reason these terms are often used interchangeably is because they both are processed as ACH payments, but there are still differences that merchants should be aware of.

ACH payments are commonly used for recurring payments, direct deposits, and larger transactions, for which the information provided is stored to use in future payments.

On the other hand, eChecks are used for one-off payments, and the information provided for the transaction isn’t stored.

SIMILARITIES

While the similarities between ACH and eChecks are noticeable, here’s a quick review:

Both are processed through the ACH network, both are EFTs, and both function between banking institutions.

To summarize, here’s a side-by-side comparison of eChecks and ACH: