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Authorize.Net E-Check
Processing
Authorize.Net provides an exclusive, fully
integrated electronic check payment method, eCheck.Net. Using
eCheck.Net, merchants can accept and process payments from consumer and
corporate bank accounts directly from their Web site or through the
Authorize.Net Virtual Terminal. By accepting electronic checks, you
expand the payment options available to new and existing customers,
enhancing customer loyalty and potentially increasing sales.
- Lower Fees - Lower rates than credit cards or PayPal.
- More Efficient - eCheck.Net does everything
online, eliminating the cost and inconvenience of manually processing
paper checks and waiting for checks in the mail.
- Fully Integrated Solution - No third-party
integration required—implementing eCheck.Net is easy for merchants
already using the Authorize.Net Payment Gateway.
- Integrated Reporting - Provides a combined
view of all eCheck.Net and credit card payment transactions. Reconcile
payment and billing activity using online reports and statements.
- Ship Product Sooner - Improved up-front transaction validation that returns the status of transactions faster.
- Security - Authorize.Net uses the latest 128-bit Secure Socket Layer (SSL) technology for secure Internet Protocol (IP) transactions.
Basic Electronic Check Process Diagram
Step 1: A
customer initiates an electronic check transaction, with authorization
to charge their bank account, via Web form or mail order/telephone
order. Once the transaction is submitted, order and payment
information is securely transmitted via the Internet to the
Authorize.Net Payment Gateway. The transaction is accepted or rejected
based on initial data validation and security criteria defined by the
payment gateway.
Step 2: If
accepted, Authorize.Net formats the transaction information and sends
it as an ACH transaction to its bank (the ODFI) with the rest of the
electronic check transactions received that day.
Step 3: The ODFI passes the transaction information to the ACH Network for settlement. The
ACH Network uses the bank account information provided with the
transaction to determine the bank that holds the customer’s account
(the RDFI).
Step 4: The ACH Network instructs the RDFI to charge or refund the customer’s account (the customer is the Receiver).
Step 5: The
RDFI passes funds from the customer’s account to the ACH Network. The
RDFI also notifies the ACH Network of any returns (in the event that
funds for a transaction could not be collected from the customer’s bank
account) or chargebacks (in the event that a customer disputes a
purchase). In the event of a returned transaction, Authorize.Net will post the return to the merchant.
Step 6: The ACH Network relays the funds for the transaction to the ODFI (Authorize.Net’s bank).
Step 7: The ODFI passes any returns to Authorize.Net.
Step 8: After
the holding period, Authorize.Net initiates a separate ACH transaction
to deposit eCheck.Net funds to the merchant’s bank account.
Finalized Electronic Check Diagram
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