An e-check is basically an electronic version of a bank check. The e-check is based on paper check laws and has the same characteristics as traditional checks, but in electronic form.
Unlike paper checks, money from the issuer’s bank account gets transferred to the payee’s account online. There are three steps in the process. First, the check writer authorizes payment from his checking account and provides the bank routing and checking account numbers. Next, the money is deposited into the payee’s account, and the e-check is cleared to the paying bank. Finally, the paying bank validates the e-check information and charges the check writer’s account.