Understanding the Costs Involved in Processing Electronic Checks
While electronic checks provide a cheaper alternative to paper checks for most users, certain costs are still involved in processing e-checks.
This comprehensive cost guide covers the various expenses associated with electronic check transactions, including:
• Fees charged by payment platforms
• Fees from banks for processing e-checks
• Fees for returned or bounced electronic checks
• Fees for stop payments or cancellations
• Other potential miscellaneous fees
• Ways to minimize electronic check fees
• Total cost comparisons with paper checks
• Cost considerations for businesses
With this background, individuals and businesses can gain a thorough understanding of the financial impacts of utilizing electronic checks and determine if the payment method makes economic sense for their needs.
Fees From Payment Platforms
Payment apps and services that facilitate electronic check payments may charge:
• Transaction fees per item processed – Typically a flat fee (e.g. $0.50) or percentage (e.g. 1.5%).
•Monthly or annual subscription fees – Optional for access to advanced features.
Bank Fees for Processing
Banks typically do not charge directly for processing incoming or outgoing e-checks. However, banks may charge for:
•Returned or bounced checks – Typically $10 to $35 if funds are insufficient.
• Stop payment or cancellation requests – Often $15 to $30 per request.
•Account maintenance fees – Some accounts charge small monthly fees.
Other Potential Fees
Users may also incur:
• Credit checks – Merchants may pass on costs for verifying consumers initiating e-checks.
•Redeposit fees – If an e-check is returned, depositing it again may incur fees.
•Research and copy fees – Banks may charge for investigating issues or providing copies.
Minimizing Fees
To reduce expenses:
• Use a bank that does not charge monthly account fees.
•Opt for free online bill pay services over paid apps.
•Limit canceled or stopped payments that incur high fees.
•Avoid returned check fees by carefully monitoring account balances.
•Consolidate electronic check payments to qualify for any volume discounts.
•Compare total electronic check cost with paper check costs.
For Businesses
Electronic checks provide cost savings for businesses by:
• Eliminating spending on checks and check printing.
•Reducing processing time and labor costs vs. handling paper checks.
•Accelerating funds availability vs. mailing deposit times.
• Minimizing return item fees due to faster clearing.
However, factoring in fees from banks and payment platforms is still important.
