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The starting point for Certegy’s product is the starting point for most online check payments: Consumers who want to pay by check answer a series of basic questions, such as name, address, date of birth and drivers license number. With some services, customers also establish an account that allows future payments to be made quickly. With others, they are asked a few verifying questions based on information in their credit records, such as name of mortgage holder and range in which their monthly payment falls. Verifying the information and authorizing the transactions takes no longer than authorizing a credit card payment, processors say. The check payment is then settled through the ACH system.
The cost of accepting e-checks is slightly below the discount rates that banks charge for credit cards, ranging from 1% to 2.65%, although the rate can run as low as 10 cents for a simple verification without payment guarantee at Paymentplus, a division of Retail Decisions.
Promotion of online e-checks to consumers has been almost non-existent. Most processors and merchants have relied simply on the pay-by-check option at checkout to bring the service to customers’ attention. Some argue that consumers’ growing awareness of e-checks at the retail point of sale, especially in supermarkets, where the clerk inputs the check information into a terminal then returns the check to the customer, will spill over into the online world as well.
“Many consumers already expect to transact with the check electronically at the grocery stores,” Mosbacher says. “As that spreads to small and medium-sized retailers and consumers become more aware of electronic checks, they will come to expect the same when they check out online.”