Paper checks have largely fallen by the wayside since the rise of card, electronic and mobile payments. But as companies challenge card processing fees, face security breaches online and struggle to gain traction in the mobile payments industry, payments service startup PayStand wants to solve these challenges with the e-check.
Just six months after founding its business model on offering credit card and bitcoin payments at a fixed wholesale cost, PayStand has announced the launch of a new choice for its users to pay with the electronic check. It’s the next generation of the paper check that PayStand says will be especially beneficial for B2B payments.
Through PayStand, businesses can receive payments without a percentage of the purchase price being lost to credit card transaction fees. Instead, transaction fees are fixed, and start at just 25 cents, the company says. The affordability can be especially useful to nonprofits, which can now accept nearly 100 percent of donations instead of forfeiting a percentage of those funds.
PayStand’s latest endeavor is a far cry from the outdated process of filling out a check. Users begin the process by entering their bank login information and password on their laptop or mobile device – even simpler, the company says, than entering the long string of credit card numbers and billing address info necessary for online card transactions.
Plus, the company’s e-check operations have also entered a new level of security for online payments, PayStand says, though instant fund verifications and payment tracking, as well as encryption technology to protect transaction and customer data.
"Whether it’s B2B or B2C payments, PayStand is intent on transforming online payments,” the company’s CEO, Jeremy Almond, says. “We’re very happy that we have made strides with the new e-check payment process."
The digital world of checks has been a long time coming. The US Treasury Department sponsored a pilot program in 1988 to explore business transactions being made through e-checks. While the Fed found in 2006 that 90 percent of checks were still being processed and cleared by traditional means, a 2007 study found instead that 40 percent of checks become “electronied” at some point in the clearing process.