Payment Options and Online Services - Electronic Checks

ELECTRONIC CHECKS

Electronic checks offer another method of online payment. Fidesic Corp., founded as CheckSpace Inc. in February of 2000, allows small businesses to make and receive payments via email. In short, Fidesic clients may present bills and make payments to other Fidesic clients via a simple email message. Using the bank account and routing data provided by its clients, Fidesic is able to transfer money between its clients' accounts. Clients are also able to download transaction data to spreadsheets like Excel and Quicken. To make money, the upstart charges 95 cents per transaction. As stated in a March 2001 issue of Oregon Business, digital checks offer a variety of benefits to companies, particularly smaller businesses. "For the average small business, say analysts at Internet research firm Gomez, the 50 percent reduction in the labor required to process payments would drop the total cost of payments nearly $600 per month. Cash flow also could benefit by speedier receipt of money owed. And there's not discounting the convenience of not having to stand in line at the bank or post office."

Operating with technology similar to that used by Fidesic, Achex, Inc. has offered electronic check payment services to consumers since its inception in mid-2000. Online shoppers making purchases at BlueLight.com, Bizland, Yakpak, and Netgrocer.com can use Achex Online Checks to submit payment electronically. Funds are then debited via an electronic clearinghouse operated by Achex from the shopper's checking account and deposited into the merchant's account; although both shoppers and merchants receive instant notification that payment has been made, the process of transferring funds typically takes two to three days. Like most other online payment methods, this electronic checking service is free to shoppers. Achex makes money by charging online merchants a small per-transaction fee. In July of 2001, First Data Corp. bought Achex, and a few months later, merged it into MoneyZap, its peer-to-peer (P2P) online payment service arm, which operates as a subsidiary of Western Union.