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The Curious Bag
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Electronic checks are used to withdraw money from your account without submitting the actual paper check. The check is electronically recorded and the information is sent to your bank. The bank then withdraws the proper amount and gives it to the vendor.
Definition
Electronic checks essentially are payments made electronically from your bank account. Rather than submitting a paper check to your bank, retailers and vendors convert your check to an electronic check and hand it back to you.
Electronic System
When you hand your check to a cashier, he will run it through an electronic system that captures the bank account information and records the amount on the check. You will be asked to sign a receipt to affirm your payment, since you get to keep the check.
The Check
Once the information from your check has been submitted, the cashier should print or write "Void" on your check. That way, no one, including the store, can use the check again.
Money Extraction
The store or institution that you paid will electronically submit your payment to your bank. Your bank will withdraw the money from your checking account and give it to the vendor.
Online Payments
Electronic checks also can be used to make online payments. The information from the check is sent to the vendor or service you are paying, but the actual check isn't.
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