High-Risk Check Processing
The check processing industry has substantially grown over the past few years. This growth has been primarily due to the tightening by financial institutions of many industries deemed unacceptable for credit card processing. As these options have all but disappeared for some businesses, the use of high-risk check processing has increased to fill the void. Today, many different types of high risk businesses use some form of check processing to accept customer payments.
For most businesses, the search for a high risk payment processor can be tedious. Depending on the type of industry, merchants can face repeated declines with few options for payment processing. Allied Payments hopes to change this. Our payment processing services are consistently growing at tremendous rates among our higher risk business partners. Most of our higher risk merchants have opted to start with or add high risk echeck processing services as a payment option.
The most common types of payment processing alternatives include:
- Check 21
High Risk eCheck Processing Services
An electronic check (also known as an eCheck) is a digital replacement for conventional paper checks. Most of the time it is used for online transactions to pay for a service or product related to eCommerce. With fewer regulations than the card associations, eChecks can be used for a wider variety of products and services.
To use an echeck, merchants complete an online form with customer bank account information from the paper check. Once the account and routing details have been sent to an eCheck processor, the funds will typically be released to the merchant within 24 – 72 hours. Most check processors offer echeck verification tools to help ensure a successful transaction including account and real time check verification services. These tools will help lower the chance of a bad check being accepted and deposited by the merchant.
Merchants can easily store the customer's payment information for future billings. Unlike a credit card, customers attempting to dispute an echeck transaction will be required to provide more information file a claim. This ultimately means fewer chargebacks and lower overall operating costs for merchants.
Advantages of eCheck Processing
eCheck processing is relatively simple. Accepting checks provides more options while minimizing the risk and cost of accepting payments. Other functions, such as remote deposit services, provide improved check payment functionality for billing management. This has become one of the factors making checks faster once purchase once billing information is stored electronically.
As consumers prefer a wide range of payment options, businesses have also reported a boost in sales once they have begun accepting eChecks. What's more, consumers also view checks as more trustworthy since they pose fewer risks and with less possibility for fraud. The improved security and verification programs have contributed to help reduce the instances and severity of fraud.
Check payments have other advantages such that transactions does not require a receipt or signature authorization. Payout times have also improved allowing merchants to be funded in less than a day. Accepting checks has also become much more affordable with many of the same features as other payment methods.
The next generation of eChecks to emerge is the Check21 program. Instead of using the federal government's bank clearing network, Check21 is entirely digital and funds are cleared nearly instantaneously.
High-Risk Check 21 Processing
Check 21 is the next generation of electronic payment processing services. Instead of having to send a paper check, Check 21 creates a digital version of the paper check for clearing. Transactions are cleared via bank-to-bank file transfers rather than using the government Automated Clearing House (ACH) network. Similar to ACH, payments made through the Check 21 network can be used for online transactions, phone transactions, and recurring debits.
The user experience provided by Check 21 payment processing is similar to that offered by ACH. Instead of using any card info, your clients or customers will send their payments to you via eChecks by offering account details and bank routing.
At the beginning, Check 21 payment processing was used for remote deposit capture (RDC) where paper checks were scanned to electronic images. Currently several banks allow you to snap a photo of a check on a mobile device and then deposit it electronically. Recently the way Check 21 is used has altered. Now the consumers can start processing transactions electronically instead of having to rely on paper checks.
A number of Check 21 processors make what they refer to as a “substitute check” that then gets forwarded to the merchant’s bank for approval. However, when you have too many returned and revoked transactions, this option will not work for your company. Plus, if your company does not have many transactions that get returned or revoked, you do not have to use Check 21 in the first place as ACH is a more affordable solution for processing low-risk transactions. Another possible obstacle that you can encounter when you use substitute checks is that a number of big banks in the United States will not welcome these types of checks and consequently will only return these.
Check 21 is a wonderful way to process payments if you are involved with any high risk e-commerce field for example; credit repair, pharmacies, and so forth. When your company goes over the minimal number of returns and revokes needed by the ACH network, Check 21 payment processing is a great answer as it makes the provision for more returns and higher revoke ratios. If that is the case, it is advisable that you go for the end-to-end electronic image exchange. With this option, there is no need to use substitute checks as the transactions are forwarded to the Federal Reserve by using an e-format.
Advantages of Check 21
Although credit card processing is quicker than Check 21 payment processing, there are definitely a few benefits in store when you opt for Check 21 payment processing. One of its biggest perks is the convenience it offers to merchants. When you opt for Check 21 processing, you do not have to sort out stacks of paper checks or spend time destroying copies which makes it much simpler. Plus, that also means you no longer have to fear that you will misplace a paper check, because a digital substitute is created that is legally identical to the one which was first created.
It is significantly easier to deposit checks electronically than submitting a paper check and can in many instances minimize processing delays caused by the time and money required to send these paper checks. What is more, similar to ACH processing, it is in many instances significantly less vulnerable to fraudulent activity too.
High Risk ACH Processing
ACH processing is used by many businesses to accept payments from their customers, and for good reason. It is less expensive and safer than card processing, in addition to the fact that approval and setup is much faster.
Over the past few years, more and more industries have become considered “High Risk” by NACHA (National Automated Clearinghouse Association). These tighter standards have led to the development of high risk ACH processing. One of the pioneers in this field was Allied Payments.
Allied Payments can give the green light to high risk ACH processing for businesses that normally will not be able to get ACH processing approval for their field or merchandise. Our high risk merchant services can help your company get high volume ACH processing. In fact, we like to believe that we are one of the leaders in the industry, thanks to our years of experience. We can approve high risk ACH payments and processing, high volume ACH processing and high risk eChecks.
High risk merchants who already have a card processing merchant account can prosper by setting up a separate ACH account that will allow for higher volumes at lower rates. Nearly every legal business is accepted and merchants can begin processing payments in less than five days.
Benefits of ACH Payment Processing
ACH transactions generally cost merchants less than other forms of payments.
With the help of high risk ACH processing services, you can send a debit directly to your clients’ checking account to be paid for services rendered and merchandise that was sold. There are several companies that cannot open traditional ACH processing in their field; because products or services sold are regarded as “unacceptable” and therefore high risk ACH processing can be a key service.
Another online banking process similar to Check21 is ACH. With an ACH, the customer’s bank will initiate the transaction whereas with Check21 the merchant is required to initiate it.
Start accepting eCheck payments
• Sign up now and start accepting eCheck payments in less than 3 days from nearly any checking account. Virtually every industry is accepted!
• Are you tired of chargebacks from buyer’s remorse? eCheck processing is harder for customers to dispute after their account has been debited.
• Recurring billing and large ticket merchants will always find a benefit in using eCheck processing over card processing.
• Our customized payment solutions allow merchants to accept credit cards, debit cards and eCheck payments by just applying with one application. eCheck processing is usually approved before credit card processing is.
In addition to high risk eCheck processing, Allied Payments also processes payments for low risk merchants. Complete the “Get Started Today” box to the right and an account representative will contact you back within 24 hours.