Digital Checks are similar to ACH in that they move money from one bank account to another bank account. However there are some key differences between the two systems
Digital Checks use the Check21 rails for settlement and clearing. They could also use ACH or combination of Check21 with image files and ACH.
- Check21 network has the ability to transmit images as opposed to ACH which is purely character based
- Digital Checks settled using Check21 network conform to UCC regulations and offer finality of settlement i.e. unlike ACH there are no Chargebacks
- Digital Checks offer clearing period of either overnight or 2 business days as opposed to ACH which is typically 3 business days. However with same day (it's really overnight not same day ) ACH both systems will offer overnight settlement
- Checks and hence Digital Checks will work with all types of bank accounts whereas ACH may not. For e.g. ACH typically does not work for 50M+ plus Money Market Accounts
Digital Checks will have Check number and image of the Check in the Payor bank account as opposed to ACH which will have 16 characters of text