Creative Commons License photo credit: hunterseakerhk		 I thought I’d follow up to my previous post detailing the back and forth I had with a buyer who had paid with an echeck in order to add some explanation to the whole paypal echeck fiasco.I used to accept echecks in order to gather in those few extra sales for people who don’t have a credit card. “What?! People who don’t have a credit card?” you exclaim. Yes, believe it or not, there are numerous people out there who don’t have a credit card. It may sound incredible but what are the figures on average credit card debt here in the United States? I’ve seen anywhere from $8000 to $10,000 a person. Well there are plenty of people that got their cards jerked because they were the ones that helped push the average so high. So what choice do they have when purchasing your digital product? An echeck or a debit card.

How do paypal echecks work? THEY ARE NOT INSTANTANEOUS TRANSFERS OF MONEY! That’s how they don’t work! An echeck is a transfer of money that takes 3-4 BUSINESS days to clear. Pretty much like a real check except even slower. And guess what? I’ve had a few echecks that have gone bad. How? The only thing I can figure is there wasn’t any money in the account when the echeck tried to clear. I believe that you have to initially have the money in the account at time of purchase but nothing stops you from draining your account before the clearance occurs.

I’ve been burned by this a few times. Usually, it’s such a small amount that it’s not worth pursuing. So I just eat the loss.

You can control whether you accept echecks on paypal as well. Log in to paypal>my account>profile>payment receiving preferences>block the following payments – Pay with eCheck for website and Smart Logo payments, or German bank transfer for all website payments except eBay.

Or you can accept them by not checking the box.

I’ll have to do some digging but I have been able to allow automatic and instantaneous delivery of products paid with echeck through payloadz or paypal. Okay, correction here. I don’t think that I’ve ever been able to allow automatic and instantaneous delivery of digital products paid with echeck. I believe that I simply emailed them the download link after receiving notification of the pending echeck. Call me an idiot. I believe the default is that payloadz will not send the product until payment clears.

Of course this pisses off a lot of people who want the product now hence the echeck nightmare. The echeck nightmare is the backlash I get from the idiots who paid with an echeck and don’t understand that it takes 3-4 BUSINESS days to clear and, or course, they want their product yesterday. “I need it now.” “Paypal is instantaneous.” “You’re ripping me off.” I got tired of dealing with the few pissed off people who can’t pay with a credit card so I just blocked all future echeck payments.

You can refund an echeck payment that hasn’t cleared by simply going to the details of the transaction and scrolling to the bottom of the page and hitting refund. Do you risk the double burn of refunding the payment and the echeck not clearing? That’s a question to which I don’t know the answer.

Buyers cannot stop payment on an echeck but they can drain their account as described above.

My advice – don’t put yourself through the headache for a few extra sales. Block echeck payments from the start.

Update: further research reveals that you might be able to cancel an echeck afterall:

1. Click theMy Account tab.
2. Click the History subtab.
3. Click Cancel in the Action column of the transaction in question.
4. Click Cancel Payment.
5. You have successfully canceled the payment.

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