Having had the opportunity to develop an API for electronic checks, test it and see how it performs, I decided to write an article sharing my experience with others.
All of us at the company were really excited about the idea of electronic checks: lower transaction fees than credit cards, no chargebacks, and pretty much everyone in North America should have a bank account, which is sure to increase our shoppers. potentials.
The first few days after integrating eCheck as a payment option, everything worked great, lots of eCheck transactions and, you know, always a 1% savings. We even started promoting eChecks on our website by adding items like “Best Choice” and moving them to the top of payment methods. The fact is that it was really the best option for us (or so we thought), but not for the client, since the money will be debited from his account faster (instead of waiting for the invoice in the case of a credit card) . I pay).
5 days (which is the standard number of days for eChecks to clear) after launch, we started to see issues. It was recurring, it was huge, and it was bounced checks: lots and lots of bounced checks. The causes of the returned checks ranged mainly from fraud, insufficient funds, or simply the person who called the bank and stopped the payment. Fraud, in case you don’t know, is a big problem for eChecks, you just have to have the account number and routing number to debit a bank account (this is how most scams work on the internet ), and both are clearly written on any physical check. So fraud was a really big problem. Insufficient funds was another big problem, as most people using electronic checks were to some degree, I hate to say it, poor, so they often had their account balance hovering around the $0 level. Finally, some people, having a second chance whether they really want to buy or not, opt for the latter, so they call the bank and ask them to stop the payment. What was more annoying than having returned checks (and having to pay a fee for those returned checks) was the fact that the transactions were correct on our end, while in fact they were a failure, so we had to let’s go through a manual procedure to cancel those transactions (on the other hand, successful credit card transactions will almost certainly remain successful, unless it’s a chargeback). Added to all of that, in most cases the product has already been delivered to the customer, so we also had to follow up with him/her, where they usually get the answering machine, and hopefully if they get a response. 1 month later we decided to remove eChecks as a payment method because we realized it was a huge waste of time and honestly we didn’t see any change in our transaction volume.
The bottom line is that eChecks are not really mature as a payment option and therefore are not recommended to have in my opinion. Unless you have a lot of resources in your billing department to handle those bounced checks and your profit margin is really high (and you also think you’ll increase sales, which is overkill), then go ahead, otherwise just stick to it. credit. cards (from my experience, chargebacks were about 1/10 of the number of returned checks). After all, why would anyone want to pay with their web bank account instead of a credit card, where you are much more protected?