How to accept electronic Checks? Debit/ATM Card ? Digital cash ?

Online checks (commonly called eChecks) are the equivalent of the standard paper checks. The online equivalent doesn't require you to have a signed check from the recipient. This is perfectly legal. All you need is the information that's on the real-world checks of the customer.

There are two ways to go about accepting online checks. The do-it-yourself method requires that you buy a program to print these checks. You then
deposit them into the bank like any normal check. The big software programs in this category are Vcheck and Intell-A-Check. There is a limited demand for this type of do-it-yourself online check processing. You will have to wait several days to make sure that the check clears before you ship the order in order to prevent fraud.

The better way of going about accepting online checks is through a transaction service which will verify that the information on the online check is complete, and will even guarantee the check for an additional fee. What this means is that the transaction service will end up reimbursing you if the check turns out to be invalid, AND certain conditions have been met. These transaction companies charge a setup-up fee in addition to a per-check and/or a percentage. One important thing to note is that most of the transaction companies out there only process U.S. checks.

Not only can you accept checks online with these kinds of programs but also by telephone and fax. All you have to do is take the necessary check information they give you and manually enter it into the program, then print out the check and deposit it at your local bank. Most check programs require you to buy special check paper to print your checks on, this paper is relatively cheap. In most cases you should be ok printing checks on your Inkjet or laser printer without having to use any special, expensive magnetic-type ink. Many banks now use optical devices to process checks rather than magnetic ones. However, before investing in any check acceptance software contact your local bank and make sure they will be able to accept checks that you print from your computer.

Another method to consider, is that some of the Secure Gateway Companies' Virtual Terminals can accept check transactions (AuthorizeNet being one of them). The ones that do this also run a check verification against a national database of bad check writers, thereby reducing the incidence of returned checks. The better services will even re-submit returned checks automatically. If you use an online check transaction service, make sure that a check verification in real time is included. There's not much to processing a check online, so don't pay high transaction fees, and especially don't pay a discount (percentage) rate on check transactions, unless they are guaranteed! Also be aware of fund holds on check transactions, and know when funds will be available.

Here are a few more check resources you should consider:

CheckMAN
Checks by Fax
CheckMatic
XpressCheX

Debit/ATM card processing is almost exactly like processing a credit card except for the fact that the order amount is deducted from the customers checking account. For more information on this service check with a Merchant Account Provider for details and pricing information.

Micropayments & Digital Cash

My recommendation is to stay away from these services for now. They still have not caught on with the public. However we have put them in this guide due to the enormous amount of hype that surrounds them, and in time they will become a viable method of accepting payment online.

The concept of Digital Cash systems is that a person fills up a digital wallet from a credit card. They then get to spend that money either via a digital wallet program running on their computer, or via a special PIN number. The future of these systems is in micro-transactions (Micropayments), say 5 or 10 cents to read an article or a page. At the present time charging people a few pennies for viewing content is impractical. Hopefully Digital Cash will solve this problem in a few years. Another downside to Digital Cash is the fact that only a small number of merchants actually allow for this type of payment acceptance. It's not even close to being as common as regular credit card acceptance.

At the moment, some of the biggest Digital Cash service companies are:

RocketCash
InternetCash
Echarge

Micropayments have been around for quite some time, but aren't as widely used by online merchants. This has caused several micropayment service companies to close up or halt further marketing of their services until usage increases. As previously discussed, micropayments are good for sites that offer online products (documents, music files, etc.) that only cost a few cents up to $10. Micropayment solutions work the same as typical credit card acceptance except that the amount taken per transaction is much smaller, thus you get to keep more of the profit.

If a Micropayment service is what your company needs check out these sites:

eTelCharge - Adds charges to your phone bill
iPin - Puts charges on your ISP (Internet Service Provider) bill
microCreditCard
Cardis - Click "The Ultimus Solution" button once on their website