Electronic funds transfer or EFT refers to the computer-based systems used to perform financial transactions electronically. An eCheck is a payment that you make directly from your bank account.
Just like a regular check, it usually takes between 3 and 5 business days for an eCheck to clear and the money to appear in the recipient’s account.
You sent a request for money to someone and the payment came back in the form of an eCheck. What is an eCheck, and how does it differ from an instant PayPal payment?
In short, both eChecks and Instant Transfers are ways to pay with your bank account. With an eCheck, the recipient receives the money in a few days. With an Instant Transfer, the recipient receives the money right away.
In the same way that Quasi-cash is the equivalent of cash in the physical (as opposed to online) world, eChecks are the digital counterpoints of the pieces of paper found in a checkbook. When someone sends you an eCheck as payment, the funds won't be deposited into your account for three or four days (however long it takes for the eCheck to clear).
Advantage Of Sending eChecks (buyer's point of view):
From the buyer's standpoint, sending an eCheck is advantageous; the funds are left in the buyer's bank account for a few extra days, earning interest, and no credit card debt is incurred. To send an eCheck, in response to an invoice or Money Request, you need to have a bank (checking or savings) account linked to your PayPal account.
Here's how - Step-by-Step Instructions On How To Link Your PayPal Account:
- When you receive a request for money, click the Pay button to make a payment.
- On the Pay Money Request page, click the More Funding Options link under the Funding Options section of the page.
- On the Funding Options page, select the eCheck option and choose which bank account to use.
If necessary, you can link a new bank account to your PayPal account by clicking the Add Bank link.
- Click the Continue button.
- Verify the payment details and click the Send Money link.
Advantage Of Receiving eChecks (Seller’s point of view):
From a seller's standpoint, there's one big advantage to getting an eCheck. Unlike other PayPal fees, which are charged as a percentage (usually 2.9 percent) of the value of the item, the total fee for an eCheck won't exceed $5.00. If you're selling an item that's valued at over $162, you'll get a break on the transaction fees. If the item is very expensive, you can save a good amount.
If you receive an eCheck payment, you get a PayPal e-mail informing you that "Cash is on the Way!" If you hoped for "Cash is Already Here!" you may feel a little disgruntled, but the good news is that you'll get payment in three or four days.
If you look at the transaction in your PayPal Account Overview, you see a status of Uncleared until the funds are transferred from the buyer's bank account. It's important that you don't mail any items to the buyer until after the payment has cleared.
It can happen: A seller might actually admit that the item description wasn't an accurate representation of the item, and offer to refund your payment. If you paid via eCheck, the seller could have issued a refund.
Like other PayPal payments, the seller could not have initiated the refund until the funds had been deposited into his or her PayPal account.