Whenever you are running a business, either you are selling your product or offering a service. If you have a restaurant, it means you are offering service and product to the customers. If you run a daycare, you are offering your services. Running a retail store means you are selling your products to the people. These products and services don’t come for free; the person on the receiving end has to pay. Usually, customers make payment in three manners: Credit card and Debit Card, Money, Paper check or Electronic check. A side note: a paper check conversion is different from an electronic or e-check conversion.
Make sure your business encourages all of these payment methods. Some customers don’t feel comfortable to carry cash on them, so they prefer to make payment by checks or credit cards. On the other hand, some customers prefer to pay with cash because they are paranoid about the banks. Let’s say a customer’s ATM card got stuck or when a credit card is not working, some wish to make the payment by the check. Having a wide range of payment options leave a positive impact on the customers.
Furthermore, with all the advancements in e-commerce and m-commerce, many customers and business owners are deviating to electronic checks. In earlier days, paper checks were one of the most used payment methods among the customers, but with efficient precession, E-checks are the talk of the town. If payments via e-check is a new concept to you, or you are confused about the differences between paper check and electronic check, then keep reading. Let’s explore the brief definition of both before we pinpoint the main differences between the two.
What is a Paper Check?
It is the second most convenient payment method. The money is drawn straight from the checking account, and the most customer perceives a check to be the safer payment method as compared to the cash. The paper check has the name of the payer, the payee, the amount of money, and the signature of the payer on a piece of paper – a paper check.
What is an Electronic or E-check?
All the details on the paper check are the same as the paper check. Same as a regular paper check the money drawn from the checking account. In addition to this, an electronic check also comes with a tracking number or ID the same as a paper check. Both, the payer and the payee can keep track of the payment. The customer who has made the payment can easily keep a record of the transactions.
Major differences between a Paper Check and an E-check
- Utilization rate
A comparison of the usage conducted by a company suggests that paper checks are still by a higher number of customers. Although in a couple of years the use of e-check has also risen. E-checks have more compelling and financially efficient features. For direct exchange, people prefer to use the e-check. Through e-check, the payer has the liberty to make all important decisions. When you are using E-check as your payment method, you don’t have to worry about any third making vital transaction decisions. The right to change the transaction time and rate are merely in the hands of the payer and the payee.
- Total Costs
As mentioned above, a large number of payers are using paper checks as compared to e-checks. After analysis, the total cost of a paper check is higher than an e-check. The total cost of a paper check is calculated after summing up the cost of envelopes, slips, signature stamps, and reading, along with the costs of balancing, sorting, transport, and research. Other than this, the list of the steps that require money to deposit and convert a paper check is endless. All these factors make paper checks an expensive payment option.
On the other hand, as electronic checks are fast, efficient and most importantly uses the electronic mode of deliverance, the money spared on manual steps is avoided. E-check is a cheaper mode of payment. In addition to this, the e-check system provides more security to its users.
- Human and Machine made errors.
It is easier to forge and even manipulate the data entered on the paper check. Even the checking units and banks turn a blind eye to minute errors. Sometimes, it often leads to the loss on the part of the payee and the payer.
On the contrary, as e-checks are processed electronically, the machine scans the check carefully. E-checks are digitally signed and have software edits eventually eradicating the human-made errors and limiting the machine-made errors. If efficiency and accuracy are your priority, e-check is the best mode of making and receiving payments.
A paper check or an e-check, which one does you think have more capacity to carry information? The information about the payment, payee, and payer is limited on the paper check. And most importantly when you lost the paper check you lose the data. If you want to keep a record of the data, you have to manually type in the numbers.
E-checks, on the other hand, can hold unlimited data. You can access the payment information in any format you please. In addition to this, all the data are already stored electronically, so you don’t have to save the payment information again.
Keep all these differences in mind and choose the payment system wisely. For information about the paper check, e-check, e-check conversion, head over to the official website of Merchant Advisors. To stay up to date, follow us on Twitter (@Onlinecheck) and Facebook (@Onlinecheck). If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.