Originally posted on https://www.musttechnews.com/everything-worth-knowing-about-electronic-checks/
The way in which we think about and use money is rapidly changing.
Gone are the days of gold and silver. Gone are the days of money needing to be in physical form. Now, we have currencies that are based on nothing at all.
But despite all the complexities of currencies themselves, even the way in which we use our currencies are always changing. It used to be a check meant just that: a piece of paper with your account info that you would write on in order to make payments to people or businesses.
Now, we have electronic checks. What is an electronic check? How are they different from regular checks?
Read on to find out all you need to know.
Electronic checks, or echecks, are in essence just like an old fashioned paper check, only electronic.
That may sound completely contradictory, but if you check out this echeck guide you’ll understand everything just fine.
Basically, echecks operate in the same fundamental ways that a paper check does. You are providing your bank account information as a means of providing payment to someone.
Electronic checks actually are part of a larger umbrella of electronic financial transactions, and part of a set of transactions known as electronic fund transfers, or EFTs.
Other forms of EFTs include ATM and debit card transactions, and even when you deposit a paper check with your phone, you are doing an electronic fund transfer.
At this point you may be wondering, “how do I use an electronic check if it’s, well, electronic?”
Electronic checks are not physical things. You cannot simply go to a store and pull an electronic check out of your wallet to give to the cashier.
This may leave you wondering, what on earth is the point of using one? What were they created for if they do less than that of a conventional check?
These would be fair criticisms, but they lack an understanding of the rise of electronic commerce.
Electronic checks came to be due to the rise of electronic commerce, or transactions that occur over electronics networks, primarily the internet.
The internet paved the way for things like electronic checks to come about, and it so happens that electronic checks were the first form of internet payment the United States treasury allowed.
While electronic checks may seem like a silly concept, it is actually a form of payment widely used and accepted both domestically and internationally.
Simple and secure forms of payment such as electronic checks allow consumers to make electronic commerce businesses such as Amazon turn into retail giants despite not having a single physical store.
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