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  1. #1
    under the oaks Original Poster Mary's Avatar
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    Default eChecks: Info & Tips for eBay and Paypal

    Reports on Blab's TTB and MHHR have shown that recently several sellers have had some unfortunate experience with eChecks. They accepted the eCheck payment, shipped the item - then the eCheck bounced !!!


    Please post additional eCheck information
    you would like to add for transactions in both
    eBay and Paypal - Thanks!



    We've become so used to the convenience and safety of Paypal direct payments that maybe some people think eChecks function in the same way. They don't - even those issued through Paypal.

    The biggest difference between Paypal payments and Paypal-eCheck payments:


    • Paypal direct transfers move funds to your account immediately.
      • Paid against Paypal account balance
      • Payment against credit card (incl. through Paypal)



    • eChecks, even through Paypal, are like paper checks: funds are NOT transferred immediately and can take up to 5 days to clear.
      • There is NO instant payment!
      • If your bank (like most) credits funds within 24 to 48 hours, the bank will still reverse the credit if the eCheck does not clear - and that could be 3 to 5 days later!
        • Banks treat bounced eChecks like any other bounced check.
        • eChecks can be canceled by the buyer, in certain circumstances, if the funds have not yet completed the clearing process.


    eChecks are far more convenient for banks and most businesses than paper checks. There is no paper to handle, they can batch process electronically and eChecks can't be forged.

    But eChecks do have many of the same risks to the receiver as do paper checks. It is critical for sellers to use the same policies with eChecks that they do with paper checks.



    Sellers: What to do if you receive an eCheck payment
    eBay instructions: First and foremost, do not ship until the funds are cleared!
    If payment is made to your Paypal account via eBay terms, Paypal will not credit the funds until they are cleared.

    If, through any channel on or off eBay, you receive an eCheck directly into your bank account:

    • Treat an eCheck as you would a paper check. The processing rules are the same.
    • Know that your bank will probably credit all or part of the funds within 24 to 48 hours.
    • BUT the funds are not fully cleared for 3 to 5 days.
    • If the check bounces, even after funds are credited to your account, the bank will take the money back.




    Links to information posts below ...




    Sellers: How do you know when an incoming Paypal payment is an eCheck ???
    Paypal payments can use funds from the account owner's

    • Paypal balance
    • Credit card balance
    • Bank account balance


    Bank balance payments have a longer and more involved clearing process. It is much more likely that a payment from a bank balance becomes an eCheck. (Read the post below on Why eCheck vs Direct Transfer.)

    How do you know which you are getting ???
    Paypal alerts you by noting eCheck transactions as "Pending" .
    Paypal does not credit the funds to your account until funds are verified.


    There is usually a link that will give more information:




    Funds are now available:




    Detail view - funds have cleared:



    Last edited by Mary; 03-16-2016 at 07:43 PM. Reason: correction

  2. #2
    under the oaks Original Poster Mary's Avatar
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    Default Sellers: Blocking eCheck Payments

    eBay's instructions: If you wish to block eCheck payments, you must do so in your Paypal account (not directly in eBay).

    Here's how ...

    http://www.youtube.com/watch?v=nFCsVat3nl0
    Last edited by Mary; 12-01-2015 at 04:31 PM.

  3. #3
    under the oaks Original Poster Mary's Avatar
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    Default Buyers: How to Cancel an eCheck

    This is a murky topic and it can be hard to find specific instructions - eBay and Paypal are not encouraging cancellation by buyers!


    • If an eCheck has never been claimed by the recipient - for instance, if it was sent to an incorrect email address - your transaction history will list the eCheck as "Unclaimed". There are options to proceed from there. The money is returned to your Paypal balance, NOT to your bank account.



    • If an eCheck has been accepted by the recipient, normal process is that the recipient can only give a refund after it clears. The refund also has to go through the 3 to 5 day clearing process before being credited to the sender's Paypal balance (not their bank account balance).


    Sellers: Do not ship before the payment is marked as cleared! Although it is not easy to do, it is possible for some buyers to cancel before the payment clears.


    Sellers: Refunds of eChecks can't be processed until after the payment clears.

    Buyers: If you want to speed up shipping by canceling or refunding your eCheck and pay instead by credit card or from your Paypal balance, be aware of the above processes and waiting times!
    Last edited by Mary; 03-16-2016 at 07:53 PM. Reason: clarity

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    under the oaks Original Poster Mary's Avatar
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    Last edited by Mary; 12-01-2015 at 04:17 PM.

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    under the oaks Original Poster Mary's Avatar
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    Default Why a payment is an eCheck vs Direct Transfer

    [this information added after the first 2 pages of posts]

    This is for PAYPAL only
    , not for any other sources of eChecks. Here is what I learned in a conversation with one of the senior Paypal people.

    First -

    • Most Paypal employess on the front phone lines are not up to speed on the esoterics of eChecks. They just know the basics.
    • The Paypal online help pages are in the same status.
    • You can waste a LOT of time trying to find more complete answers from those two sources.

    I pass that along to save someone else some time.


    So according to the senior Paypal guy Jerry -

    - An eCheck is far more likely to occur with a bank-account-source funds transaction than with other sources.

    - ​The sender does not determine if/when a payment will go as an eCheck.

    - ​An eCheck is sent when a payment meets certain risk criteria, as determined by a combination of factors coming from banks, Paypal and even other processing entities.


    The operative terms for eChecks are Risk, Risk Filter and Risk Mitigation.

    If that's all the detail you ever wanted, you can stop here and skip the deeper dive!



    More about Risk Filters and Risk Mitigation


    - If the risk auto-flags are not tripped, the payment will go as an instant transfer, regardless of funds source.

    - Payments from the Paypal account balance or from a credit card balance are the least likely to be flagged as an eCheck, but it can happen.

    - Risk Filters are complex
    , but fundamentally they are supposed to flag transactions that are at higher risk of coming up against either

    • unauthorized use of an account,
    • fraud, or
    • insufficient funds.


    - A key to understanding the risk flags that trigger an eCheck is the question "Is this transaction typical of your history?".

    - Sending funds as an eCheck gives the entire system more time to be certain of both a valid transfer of funds, and to give payors a chance to claim "foul" for an unauthorized payment before the funds are fully committed.

    Banks and transactions going through the ACH system that clears payments between separate financial entities have by far the most risk mitigation flags. But Paypal also has some risk flags, as do some of the amalgam of separate corporate entities that are involved in the transactions clearing process.

    Although transactions from one Paypal balance to another Paypal balance seem to be the easiest and least risky to process, there are risk flags alerting of possible unauthorized use of someone else's account.


    Some of the risk auto-flags include things such as
    • Unusually high payments compared with the past history for that account.
    • Certain types of goods that attract more fraud, such as computer games and electronics.
    • Unusual frequency or other pattern of transactions, compared with the past history for that account.




    Calling Paypal for more information about problem eChecks - ask for one of these departments

    Limitations Department -
    for limitations placed on your account, or that you want to place on your account, to help close it off from unauthorized use

    Security Settings & Payments Department
    - to better understand your options

    Disputes & Claims Department - with the caveat that Paypal can't always recover funds that are gone, but in certain cases they can take action to stop further problems of certain types




    Sellers: If you are suspicious about a payment you've received through Paypal (including an eCheck that doesn't clear)

    Ask Paypal for a Buyer Fraud Review of that transaction.

    Paypal encourages you to let them know if you are suspicious! Paypal can see a LOT of information about the transaction that you can't.

    Alert Paypal as soon as possible, before transaction records held outside of Paypal become less accessible, or are even discarded.

    If Paypal finds that the payment appears to have been manipulated with bad intent, they may not be able to refund you, but they can take action against the account that sent the funds. If they find sufficient cause to do so, they can place limitations on the account. They can even ban the account owner from ever using Paypal again. All based on Paypal's determination of the circumstances, of course.



    Paypal likes to remind everyone: If a payment didn't come from Paypal, it is not under Paypal protection! Jerry reminded me. In addition to the convenience, this is a big part of what the fees are for.
    Last edited by Mary; 03-16-2016 at 08:00 PM. Reason: add information

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    Schere: 1973 - 2009 Eviejean's Avatar
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    Thanks for the in-depth information Mary!

    I've been lucky that in the past any eChecks I've received as payment have cleared with no problems.
    But I understand there have been a rash of bounced eChecks mentioned on MHHR lately so I think this is a VERY good thread to have on Blab!

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  7. #7

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    I'd like to know how I can avoid sending e-Checks...
    I have a Pay Pal account attached to my UK bank account
    99% of the time then I sent money either by e-Bay or not E-Bay the seller gets the money immidiately
    but in 1% of the time it decides to sent an e-check and it takes ages to clear but I haven't done anything different than all the 99% of the time than Pay Pal sent money immediatly...
    more confused than anything, luckily it's not that i buy something that can rot... or is needed immediately

    Ulla Harneit
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  8. #8
    under the oaks Original Poster Mary's Avatar
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    Quote Originally Posted by Lora View Post
    I'd like to know how I can avoid sending e-Checks...
    I have a Pay Pal account attached to my UK bank account
    99% of the time then I sent money either by e-Bay or not E-Bay the seller gets the money immidiately
    but in 1% of the time it decides to sent an e-check and it takes ages to clear but I haven't done anything different than all the 99% of the time than Pay Pal sent money immediatly...
    more confused than anything, luckily it's not that i buy something that can rot... or is needed immediately

    Ulla Harneit
    Paypal offers an option of how to pay - from your Paypal balance; from your bank account; from your credit card.

    If you opt to pay from your bank account, that is an eCheck.
    As far as the payment clearing, it follows the same lengthy process as a paper check.

    Another way to think about it: Paying from your bank account balance (even from Paypal) is the same thing as writing a paper check, as far as buyer and seller are concerned.

    It is much more convenient for the banks who don't have to process the paper check. But otherwise it follows almost the same path through the clearing process.

    Paying from your Paypal balance is NOT an eCheck. The funds transfer much more rapidly and don't go through the check clearing process.

  9. #9

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    Usually, if there is an echeck (or other funding delay) it is because there were not funds in the account and credit card payment wasn't selected.
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  10. #10

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    Quote Originally Posted by unicornwoman View Post
    Usually, if there is an echeck (or other funding delay) it is because there were not funds in the account and credit card payment wasn't selected.
    i never had a credit card linked to my account and I have enough funding in my bank account, in fact just got paid for my job. and next day I bought something else, same account and no e-check again...

    Ulla Harneit
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  11. #11

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    Wow, I guess I have been out of the loop. Thank you, thank you , thank you for this information. I am off to block echecks on my Paypal acct. right away.
    Ann

  12. #12

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    Mary, thanks for digging up all this info!
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    I pay from a bank account all the time as I have a business account linked to my Paypal account. Only in the past three weeks or so have some of those been 'e-checks' rather than a simple payment that went through just like paying from the Paypal balance. In fact, I made two purchases on Friday from the account. One is apparently an e-check and the seller is waiting to ship, the other made a few minutes later in the day cleared immediately and I already have the item. I've made about 200 purchases in the past six months, only four of which were e-checks, even though nearly all of those were made from a bank balance rather than a paypal balance.

    I wish Paypal would give the buyer a notification that the payment will be an e-check and that the payment may take a week or more to clear! The seller notified me or I never would have known. I had a notification last week that my e-check payment had cleared---- for an item I bought three weeks ago and received two days after purchase.

    I made an order this morning from a company and paid with Paypal. I called them to verify the order had gone through as I didn't receive an email order confirmation like I normally do, and they verified that yes, they had the order, payment had already cleared, and the order was shipping tomorrow. I asked if it came through as an e-check and they said it didn't appear to. Yet my Paypal balance is 0.00 and the funds came from my bank account. I'm confused.

    Last edited by FourWindsFarm; 12-02-2015 at 12:19 PM.
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    Paid Participant onekindacowboy's Avatar
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    I also have a direct link from my pp to my checking account. And just like Ulla and FourWinds most of these times it is a direct deposit and the payee doesn't even know it wasn't from a PayPal balance. It is termed an "instant transfer". Every once in a while it is an echeck. I actually don't know if that is on paypals end or my banks end. It could be possible that the bank is flagging it and not PayPal.
    Anyway I will continue to accept echecks and encourage others to do so for most transactions. As long as you wait for them to clear you have just as much protection.

  15. #15

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    Yes, that. I've only had a few that were e-checks; the rest came through as 'instant transfers' and the payment cleared immediately except for a small percentage that ended up as e-checks with no rhyme or reason. Is this a new thing?
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    Paid Participant onekindacowboy's Avatar
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    No it has happened as long as I have had a linked account which is maybe 10 years. I think it could come from the bank side and not PayPal.

  17. #17

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    All I know that i haven't done anything different I almost never have any money in my Pay Pal account, I never had a cedit card linked to that account, just my bank account and didn't click on anything different then all the times then it went through immediately... and it's not an unusual amount either

    Ulla Harneit
    missing the Photos-forum

  18. #18
    under the oaks Original Poster Mary's Avatar
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    OK I called Paypal to understand more in depth what is going on with an eCheck ...

    ... and my post above, #12, is WRONG about what determines an eCheck. The person sending funds has NO control over that. It depends on Risk Factors that are auto-flagged by the system. (There are more flags on payments from bank balances than from Paypal or CC balances.)


    So I added in what I learned to the post I kept reserved on the first page for more information. Sorry to send you back a page ... but more than you ever wanted to know is in the post that I've linked here for your convenience.



    Here is what I emphasized to senior-Paypal-guy Jerry, who explained it all - When we send payment for something, we are expecting a direct transfer to happen immediately. If it goes as an eCheck instead - beyond our control! - that is a whole other situation for both us as the buyer and for the seller as well. Now everyone has to wait on the thing to clear, which can be a problem if we are expecting faster shipment or services.

    The eCheck is supposed to offer more protection to everyone - I do get that. I think it would help a great deal if us mere mortal Paypal users actually understood eChecks!

  19. #19

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    I just went to see about blocking e-checks and couldn't see how to do it - the tutorial didn't seem to apply to what I found. Have they changed their policy and now don't allow you to block e-checks?

    Wait, now it seems to work. When I tried before it told me I had reached an outdated page in PP. Weird....

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    Paid Participant onekindacowboy's Avatar
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    Mine hardly EVER are echecks. But I use the linked debit card almost exclusively for purchases around town so my algorithms probably are different than most.
    I don't think they still use the algorithms for pp debit card purchases as I have been told they have a new system in place. When they used the algorithms, I could buy hundreds of dollars worth of goods at Missouri Goodwill stores but my card would be denied if I spent $100 at a restaurant. HaHa. Happened. Embarrassing.

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