How do ACH deposits compare with checks?
The end result of an ACH deposit and a paper check is the same—once the transaction is complete, money is moved from one account to another. However, there are distinct differences between automated clearing house deposits and checks, including cost and how they are processed.
Paper checks involve more processing steps, and therefore more administrative expense. The average cost of ACH payments is between $.15 and .25, while paper checks cost between $2 and $4, due to administration costs and financial institution fees. Checks are also more inconvenient: the payer needs their checkbook handy, the payee needs to accept the check, there is often mailing involved, and checks can be lost, stolen, or forged. The receiver will need to head to the bank or use a banking app to deposit the funds.
ACH deposits, however, are processed digitally. There is no need for a check, no risk of the check being stolen, and no waiting for a check to clear your account. Traditional ACH deposits can take several days to process. However, same-day ACH is making the process even easier by allowing ACH to process faster.
Are ACH deposits and eChecks the same thing?
Informally, eChecks are paper checks that have been manually converted into ACH debit requests, where the information has been digitized and the check archived or destroyed. However, the term can also represent the idea of ACH transactions as "a digital replacement for the paper check", where no physical check is ever used.
Many mobile banking apps let customers capture paper checks via their phone’s camera. Those apps might then strip the relevant info and create ACH requests, or they might just forward the digital scans to a traditional check-clearing facility.
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