Pay-by-bank and e-Check: Why it’s time to catch up

For years, businesses have leaned on paper checks or cards as their go-to payment rails. But as customer expectations shift and technology advances, “pay-by-bank” options like e-check and ACH transfers are no longer fringe alternatives — they’re becoming mainstream. If your business has been slow to adopt, now’s the time to reconsider.

What is Pay-by-bank, really?

At its simplest, pay-by-bank, or e-check, allows money to move directly from one bank account to another — securely, digitally, and without the middle layers of card networks or paper checks.

Depending on the context, it may be called:

• ACH transfer
• E-check, often used for bill payments like rent or tuition
• Direct debit
• Pay-by-bank

Regardless of the name, the core idea is the same: Connect bank-to-bank, move money faster, with lower costs and fewer steps.

Why businesses use ACH for payouts

If your enterprise is still issuing paper checks or relying solely on card rails for payouts, you’re missing out on a faster, cheaper, and more secure channel. ACH payouts can help you:

Save on costs

ACH transactions are generally less expensive than card payments or checks. ACH transactions average around $0.26 to $0.50 per transaction, while paper checks cost anywhere from $2 to $4 or more due to printing, postage, and labor costs.

Speed up delivery

While not instant, same-day ACH is now widely available, reducing payout times from days to hours. Although checks may provide the ability to hold funds longer, pay-by-bank affords the opportunity to control the payment timing and actually hold funds until the moment they are sent. With current momentum towards timely payouts, especially for marketplaces or businesses where retaining providers is critical, controlling payments can be a key differentiator.

Improve accuracy

Chasing lost checks may delay cash outlays, but they carry considerable cost. The direct cost typically ranges from $30 to $100 or more per check. The effort is even more expensive as lost checks require manual effort, including stop orders to the issuing bank, verifying the original check was not cashed, reconciling internal AP systems, and perhaps most time-consuming, handling customer service related to the lost check.

Scale with confidence

Direct-to-bank payments use a proven, regulated system and assure recipients of timely and trusted financial transactions. Balances in the recipients’ accounts are automatically updated and can be immediately verified. From the user’s perspective, the payment is seamless and reliable.

E-check and pay-by-bank disbursement use cases

For marketplaces and gig platforms, sellers and service providers want faster payments, and keeping them happy is key to retaining their talents. Across high-volume disbursements, paying by bank delivers a better partner or seller experience.

Insurance, construction, and healthcare may appear very different, but each has very high payment volumes. Across one-time and sequential payments, these companies process massive quantities of paper checks to suppliers, claimants, and subcontractors. Volumes here dictate payout efficiencies and smarter cash flow management. Controlling the flow of funds and the experience translates into competitive advantage.

Mid-size companies and SMBs may not have the staff to manage and process check payments, necessitating a less manually intensive approach. Direct payments to bank accounts for employees, contractors, and other small businesses smooth the payment process for both senders and recipients. And, as these businesses may have smaller cash reserves, timing payouts is a critical part of the equation. With pay-by-bank, reconciliation is clear and well-managed.

Consumers are choosing pay-by-bank

On the consumer side, direct payments via bank are gaining traction as an option at checkout. Once set up, consumers can pay directly from their account repeatedly without entering card numbers or other information each time. With increasing resistance to debt, debit cards and direct payments translate to better financial stewardship. For large purchases like travel, tuition, or healthcare bills, consumers avoid card limits or fees.

For merchants, offering pay-by-bank expands choice and lowers interchange costs while keeping checkout simple and secure.

The “Late Adopter” advantage

If your company has not yet adopted pay-by-bank, it’s not too late. In fact, waiting has some advantages. Reflecting advances in technology and funds flow, direct-to-bank payments are more user-friendly, backed by modern APIs, making setup faster and more flexible than ever.

At Alviere, the HIVE technology platform can connect new payment options, including pay-by-bank and e-check, with one line of code. Implementations are straightforward, working with current systems and process workflows.

How to get started

If you’re exploring e-check for payouts or customer payments, start with:

• Understanding your payout needs — high-volume disbursements? recurring consumer payments? refunds?
• Evaluating costs and timelines — compare against current card/check spend.
• Prioritizing user experience — the smoother the flow, the higher the adoption.

Pay-by-bank is moving from innovation to imperative

Direct-to-bank payments aren’t just a cost-saver — they’re becoming an expectation. For payouts, they reduce friction, cut costs, and speed up delivery. For consumer payments, they open a direct, trusted channel to pay.

The bottom line: If your business hasn’t yet embraced e-checks, it’s time to catch up — and possibly leap ahead.