Any consumer payment method is only as good as its end-user adoption. As more merchants move to minimize costly credit card transactions, the challenge has been identifying payment alternatives that have comparable accessibility, promptness, and ease of use.  Furthermore, Automated Clearing House (ACH) and eCheck payments have not emerged as feasible alternatives. They suffer from high attrition through cumbersome interfaces and long processing times.

Checkbook offers a seamless interface, requiring minimal input for effortless consumer onboarding: payments are initiated in a matter of seconds, with instant account verification for major banks and offer next-day or fourth business day settlement, depending on the level processing chosen by the merchant.

Our positive end-user experience with digital checks, has led to higher levels of customer adoption and, in turn, increased fulfillment and lower total system cost.


We will explore challenges associated with existing payment methods and how Checkbook’s platform solves those issues, for major financial service providers that we currently work with. 

Client Challenge - Credit Card Payments Cost & Lack of Alternatives

As a financial services organization, the client serves a very large customer base that undertakes thousands of transactions each day. 

The client was seeking a new payments settlements system for their small to medium business clients, who still utilized paper checks as their primary payment method. These clients were already used to the convenience and ease that came with paper checks and were hesitant to move to a completely different payments system that did not offer the same tracking capabilities, while charging them merchant transactions fees higher than the cost of sending paper checks. 

Costs included:

  • Purchase of double boxes of checks - $16.97 (120 checks) - purchased from banks
  • Bank revenue gain per check $0.30

In addition to the challenges these small to medium businesses faced, the client was trying to lessen the various internal costs, associated with the processing of paper check payments:

  • Back office handling costs of $0.09 - $0.15 for payments processors 
  • Processing costs of $0.60 per check for banks
  • Call center costs (check payment discrepancies, delayed checks, lost checks etc.), costing $180/year/client
  • Bank charge per check 

As a result, the Client began to have active discussions with eCheck providers; to see if there was a better, faster, easier and cheaper digital solution to this paper proble

Previously, customers opened and replenished their accounts using credit cards. While credit cards enjoy widespread consumer adoption and ease of use, the resulting processing costs to accept such payments exceeded $200,000/month, prompting the client to explore payment alternatives.

When the client attempted to eliminate costly credit cards as an accounts receivable option, the Client reported difficulties with customers adopting ACH/eChecks and paper checks, resulting in almost total customer attrition and loss of revenue. Even those customers who did try the ACH system had to wait for an average of 1.5 weeks to begin trading.

Old Fashioned Ways

  • Paper Checks: Aside from the inconvenience of manual handling and purchasing postage, paper checks became an unfeasible option for the vast majority of customers who were unwilling to endure inordinate processing times.  Paper checks had to journey several days through the mail with funds held until the check cleared. This idle intermission was costly to both the customer and the Client, leading to scant paper check usage.
  • ACH/eChecks: The remaining options were ACH/eCheck payments. Yet, ACH/eCheck payments were also not viable options as processing times still took more than six business days with unwieldy interfaces that required the manual fetching and inputting of routing and account information.  Additionally, account verification spanned at least two business days as customers had to confirm micro-deposit amounts, with another four business days for actual ACH settlement. The end-result was a high-friction experience for customers with long hold times.

The New Way - Digital Checks

Checkbook’s digital check technology creates a legally valid digital check image from information entered by the user, such as the recipient’s name, email address, and amount. The image is then immediately sent via email to the recipient for instantaneous deposit, or print-out should they so choose.

By creating a digital check image, Checkbook is able to fast-track processing using the “Check 21” system already in use by most banks, which allows for overnight clearing.  For non “Check 21” transactions, Checkbook utilizes ACH to initiate an ACH settlement, which can be overnight or three business days, depending on the participating banks, among other factors.

Furthermore, Checkbook’s digital checks can be used to disburse funds overnight to individual users, providing an efficient, extremely user-friendly method at the cost of ACH or less.

Solution - Checkbook’s Digital Checks

With Checkbook’s API-based architecture, the Client quickly integrated digital check payments into its website. The entire programming effort required to integrate Checkbook’s API took less than one working day for a single programmer due to the efficiency of RESTful API, utilizing a single line of code to do the transaction charge, and another line of code for “callback.”

Once integrated, customers belonging to a major bank were able to instantly verify bank account information by using their bank login credentials, thus avoiding the need for micro-deposit verification.  Additionally, this integration decreased customer attrition given that customers did not have to retrieve routing and account numbers. After instant verification, the customer only had to enter the amount and press ‘send’, instantly completing the transaction.

This instant verification by Checkbook also provides real-time funds/balance verification, which may allow the Client to instantly credit customer accounts, eliminating account idle time.  Like ACH/eChecks, Checkbook only charges a nominal fee per transaction, regardless of the amount, which is ideal for volumes of large transaction amounts.


After the Client replaced credit cards and ACH/eCheck payment options with Checkbook’s digital checks API, transaction costs fell 95% to less than $10,000/month, from $200,000/month.

Additionally, customer retention increased after onboarding in stark contrast to the attrition experienced by ACH/eChecks and paper check options. Specifically, the number of attempted new account openings increased by 2X upon switching to Digital Checks within the first month, and they have been increasing since.

The client also reported positive feedback from customers, noting the ease-of-use and intuitiveness of paying instantly with a digital check, with hold times effectively eliminated.  

Calls to customer service experienced a 33% drop and customer service feedback ratings related to account fundings went up from 2.x to 4.x on a scale of 5.


Credit card payments are widely adopted by consumers, but carry significant costs to merchants, while ACH has seen miniscule adoption even after almost 40 years of operation, hindering its usefulness.

Both options are ill-suited for cost-conscious businesses that also focus on the end-user experience, highlighting the value of Checkbook’s digital checks as an efficient, low-cost, simple alternative that combines the cost-savings of ACH and the adoption levels and immediacy of credit cards.

While digital checks do not provide the ‘hold’ on funds that credit cards do, real-time balance verification provides the equivalent of credit card amount authorization.

Further, Checkbook’s API enables seamless integration with easy end-user onboarding and transaction accounting, and efficiently processes payments with funds available the next business day or up to four business days in some cases.

The Bottom Line

Checkbook’s digital check technology is an end-to-end, simplified payments solution that offers a clear financial and operational advantage to businesses over other payment options. It's effortless onboarding increases customer adoption and retention, and increases revenue and fulfillment by reducing ‘drop-off’.

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