Most people think of only one thing when it comes to payments for transactions conducted on the Internet: credit cards. This is by no means the only way to accept payment on the Web – it’s now possible to accept checks online.
Taking checks online is a great advantage to the merchant, according to Nick Madamas, vice president of OnLine Check Systems. “Credit cards are rescindable. The customer can reneg or charge back. You can’t do that with a check. It’s a form of contract.”
Some electronic checking systems provide software that allows merchants to physically print out a check, given a customer’s account information, and then take it to their bank. But OnLine Check Systems (http://www.onlinecheck.com) provides a way for merchants to accept payment for online transactions in the form of an electronic check – that doesn’t require a printed version.
For merchants that use OnLine Check Systems, the process is simple. The customer clicks on a check icon on the merchant’s site. A blank check appears. The customer enters their check number and account information in the appropriate places and submits the form. This information goes to OnLine Check Systems, and is sent to the merchant’s bank, where the account is immediately credited. The merchant gets an e-mail invoice for every purchase, and the customer gets an e-mail confirmation.
Surprisingly, this costs much less than processing credit cards. There is a one-time setup fee is $150. Transaction cost is 2 percent, with a minimum fee of 99 cents and a maximum of $5, whereas credit card fees can be up to 14-15 percent per transaction, with an unlimited cap.
The service has definite appeal to merchants, but will consumers make use of the system and embrace the reality of paying for online purchases with a “virtual check?” Does the idea of increased traceability and accountability of checks as opposed to credit cards make this a more comfortable and viable option in consumers’ minds for e-commerce payments? Merchants are already seeing the results.
Pat Manginelli, director of new ventures with the Rocky Mountain News, recently started using the system to accept payments for subscriptions. Within the first three days of using the service, the Rocky Mountain News received four paid full-year subscriptions through the OnLine Check Systems – without even marketing the service. “It’s amazing,” says Manginelli.
Manginelli is pleased with the system. “We like it a lot. We like it because it gives people that are buying on the Internet another opportunity. It allows us to offer a full platter of services for e-commerce.”
Madamas agrees that this is a great advantage of the service. “It’s a customer service tool. You don’t want to use it instead of a credit card. You want to use it in addition. The merchant is giving his customers another option of payment.”
Another option the service allows merchants is the ability to accept checks over the phone. This software is also included in the setup, and takes only five minutes to install.
There is no training necessary or lengthy manuals to consult, since the only software that the merchant installs is the programming for the link on their site that allows their system to talk with OnLine Check Services’ system. All transactions and record keeping is done by OnLine Check Systems.
Manginelli likes the fact that the important transaction information is not on his server. “It doesn’t reside on my site, it’s on his secure server.” People can’t get to any information through the Rocky Mountain News Web site – it’s not there. “I like it. I feel good about it.”
