How do electronic checks work

Question

How do electronic checks work

Answer 1

Suppose you write a check at the store...  under the old method, the store would deposit the check at their bank, the bank would route it through the Federal Reserve Bank system to your bank, which would then debit your account.  This usually took a 1-3 days, depending on the distance involve (called the "float").

With an electronic check, the store runs it through a special scanner which retrieves the bank and account information, then sends it electronically through the Automated Clearing House, and on to your bank, which debits your account, just as if you had used a debit card.  This happens almost instantaneously, so there is NO float.  All WalMart stores are using electronic checks now, and they give you your canceled check back before you leave the register.  WalMart already has your money in their account when you walk away from the register.

Answer 2

There are two kinds of electronic checks,  One is for Withdrawal the other one is for deposit or better know as Direct deposit.

Direct Deposit= is a deposit directly to your Checking or Savings account from your employer, or bank.  

Withdrawal electronic check is when the fund are withdrawal from you account by YOU providing the Routing number and account number on your check.  This method is used over the phone more often

Regardless, which electronic check is use...You must provide a Bank Routing number ( where they are putting the money) and Account Number ( who is getting the money)

Hope that helps

Answer 3

The money comes out of your account as if you had used a debit card. One day faster than processing a check the old-fashioned way. /

Answer 4

They are processed through the ACH (automated clearing house) using your routing and account number. Although, sometimes the company processing it may duplicate a physical check from your account, print it on MICR paper and physically send it the bank.

Answer 5

it's just basically an "approved by you" online checking account withdrawal by the person you gave the permission to access your checking account.......or debit transaction......usually with a few dollars fee....

Answer 6

google it