Electronic checks and ACH payments are two common ways for businesses to move money directly between bank accounts – but they serve different use cases. While both rely on the Automated Clearing House (ACH) network, they differ in purpose, processing time, cost, and how banking information is handled. ACH payments have grown significantly, increasing from 18.3 billion transactions in 2014 to 31.45 billion in 2023, reflecting their widespread use for payroll, recurring bills, and vendor payments. At the same time, electronic checks (eChecks) are gaining adoption as a digital alternative to paper checks for one-off payments.
Trustpair secures ACH payments to vendors by continuously auditing supplier data and controlling payments before execution. Request a demo to learn more!
Echecks and ACH Payments: Key Takeaways
- Echecks are digital versions of paper checks, typically used for one-off payments and processed through the ACH (Automated Clearing House) network.
- ACH payments are designed for recurring or high-volume transactions, such as payroll, subscriptions, and vendor payments, using stored bank account details.
- Processing times are similar but slightly faster for ACH, with ACH payments usually clearing in 1–3 business days versus 1–5 days for electronic checks.
- Both methods rely on the ACH network, making them cost-effective compared to wire transfers, though ACH is often cheaper at scale.
- ACH payments are generally better suited for businesses, especially for recurring B2B payments, while eChecks fit occasional, one-time transactions.
What are electronic checks?
Echecks are electronic versions of paper checks. They are usually one-off payments that use the Automated Clearing House (ACH) to go from a checking account to the recipient’s bank account.
They do process a lot faster than paper checks though. This is because of the manual processing that is involved with an in-person check.
Here are some of the dangers of Echeck:
- Fraud
- May bounceback
- Processing delays
- Chargeback fees
Echeck vs wire transfer
An Echeck is a digital or online version of a paper check as it functions the same. A wire transfer is a digital payment method that is focused on moving money between accounts in one transaction.
They are both electronic fund transfers (EFTs). Echecks can take 1-3 working days. In comparison, cross-country wire transfers can take as long as five. However, wire transfers can be under 24 hours if it’s between the same financial organization.
Learn the differences between ACH payments and wire transfer here.
Echecks vs direct debit
If you were looking to compare Echecks vs direct debit, be mindful that the Echeck is a type of direct debit.
The difference is that a direct debit involves an organization taking funds from the customer’s bank account. It is an automated payment process that can be used for things like customers’ household bills. Whereas, an Echeck is created by the payer to the payee.
Echecks vs debit card
Echecks are slower than debit card transactions as the bank must accept and authorize the payment. With a debit card, you can simply make the payment on your card and it is approved, provided that you have sufficient funds in the account.
However, Echecks tend to be more secure as they require approval and authentication.
Below is a global comparison table:
| Payment method | What it is | Typical use case | Processing time | Who initiates the payment | Key differences vs eChecks |
|---|---|---|---|---|---|
| Electronic check (eCheck) | A digital version of a paper check processed via the ACH network | One-off B2B or B2C payments | 1–3 business days | Payer | Baseline: uses ACH, requires bank authorization, higher fraud and bounce-back risk than cards |
| Wire transfer | A direct electronic transfer of funds between banks | High-value, urgent, or international payments | Same day to 5 business days | Payer | Faster for urgent payments, higher fees, bypasses ACH network |
| Direct debit | An automated payment pulled from a customer’s bank account | Recurring payments (bills, subscriptions) | 1–3 business days | Payee | Direct debit is automated and recurring, while eChecks are usually one-off and payer-initiated |
| Debit card payment | A card-based payment deducted instantly from a bank account | Retail and online purchases | Near-instant | Payer | Faster approval, lower friction, but generally less secure than eChecks for B2B payments |
What are ACH payments?
ACH (Automated Clearing House) payments are a digital way for a merchant to send and receive money. The payments online take place using the ACH Network.
They are electronic fund transfers that involve a bank account number and a routing number.
ACH payments to vendors can be secured by using software like Trustpair. The platform stops ACH fraud by auditing supplier data in real-time and controls payments before execution.
There are two main types of ACH payments:
- ACH debit transaction – takes funds from an account (a subscription payment that recurs)
- ACH credit transaction – sends funds from an account (pay salaries of staff)
ACH vs wire transfer
Both ACH and wire transfer payment methods involve the movement of money from one place to another. ACH online payments can take 1-2 days, but usually at no cost. Whereas, wire transfers can be under 24 hours at times but they come at a fee.
What are the main differences and similarities between Electronic checks vs ACH transactions?
The main differences and similarities are:
- payment processing network
- purpose
- banking information storage
- processing time
- cost
Purpose
Echecks are usually for one-off payments, in some cases, they can recur. On the other hand, ACH payments tend to recur more often and could be used for subscriptions, to pay for household bills, or other routine payments to suppliers.
Banking information
Echecks banking information typically isn’t stored whereas, for ACH payments, the difference is that the banking information is usually held to enable debits in the future.
Processing time
This can vary. But for the most part, digital checks take between 1 and 5 days to process for a customer. This can be on the longer side for the authorization of one-off payments.
ACH payments usually take between one and three business days.
If you need to transfer money quickly for one-off payments, for example, you can make use of immediate ACH transfers. This can be processed by some financial organizations. The instant payment can be costly though (approximately $25 per transfer).
Cost
This varies but for Echecks it can cost between $0.20 and $1.50 for every transaction.
For ACH payments, you can be paying between 0.5% and 3.5% of the transaction. In 2022, a survey found that the median cost of initiating and receiving an ACH payment was between 26 and 50 cents. However, sometimes there can be no fee.
Network
Both payment processing methods use the ACH Network. This was set up around the 1960s to process digital transactions.
The network enables banks to work with one another for payments.
| Echecks | ACH | |
| Purpose | Usually one-off payments | One-time or could recur (households bill payments, payroll, or paying suppliers) |
| Banking information | Not stored | Can be stored |
| Processing time | 1-5 working days | Usually 1-3 working days |
| Cost/fees | Usually $0.20 – $1.50 per transaction | Sometimes no fee but usually around $0.26 – $0.50 |
| Network | ACH network | ACH network |
| Electronic fund transfers? | Yes | Yes |
Electronic check vs ACH: Which one should you choose for your business?
This depends on what your purpose is. If you are sending a one-off payment, we would recommend Echecks. However, ACH payments are better suited for recurring B2B payments and a business’s payroll and paying US-based suppliers.
Additionally, given that ACH payment transactions can be recurring, this frees up time in the business to spend on more high-priority tasks.
Recap
Now you know all about the differences between electronic checks vs ACH payments. Echecks are usually one-time payments that are digital versions of paper checks. ACH payments can be one-off or recurring for bills or payroll. Remember, Trustpair’s software provides security for ACH payments to vendors thanks to automated account validation. This blocks ACH fraud.