An eCheck, or electronic check, is a form of payment processed through the Automated Clearing House (ACH) network, the same system banks use to process traditional paper checks.
To use eChecks on PayPal, you will need to link your bank account to your PayPal account and provide the necessary information to authorize the transaction.
Remember that eChecks can take several days to clear, so the funds may not immediately be available in your PayPal account. That means it can stay in a pending status for ten business days or more before you can access the money.
If it has been longer than that since you received notification of the deposit, there are some steps you can take to resolve the issue.
Why Is My Incoming eCheck Pending on PayPal?
An eCheck is an electronic payment funded from a sender’s bank account. Most transactions clear in seven business days, but it can take longer. PayPal sellers are advised not to ship any items or provide services until the money clears and becomes available to access in your account.
Several reasons could be the cause of an incoming eCheck showing in a pending status when reviewing your transaction history on PayPal. Here is a review of the most common issues that trigger this issue.
- Today, eChecks can take several business days to clear, depending on the bank and the payment amount. The payment will be marked as “Pending” on PayPal during this time.
- If the person who sent the eCheck has insufficient funds in their bank account, the payment may be declined or take longer to clear.
- PayPal may review certain payments to protect against fraud and other risks. During this investigation, the payment may be marked as “Pending” until PayPal completes the necessary checks.
- If your PayPal account is new or has not been fully verified, PayPal may hold eCheck payments until the account is verified.
If you are concerned about your pending eCheck payment status, you can contact PayPal customer support for more information.
Why Does PayPal Hold Some Payments for Investigation?
PayPal may hold some payments for investigation to protect its users from fraudulent activity or to comply with legal or regulatory requirements.
If PayPal holds a payment for investigation, it will notify the buyer and seller and provide instructions on resolving the issue.
Although an investigation can happen for any reason, the most common issue involves security checks. PayPal conducts them to prevent fraud or other suspicious activity on its platform.
These checks may involve reviewing the payment details, the buyer’s and seller’s account history, and other factors.
Another issue involves account performance. PayPal may hold payments if a seller has a history of disputes or chargebacks. This step allows the platform to investigate the seller’s performance and ensure they comply with policies, even when an eCheck is pending.
PayPal may hold payments if it is required to comply with laws or regulations, such as those related to anti-money laundering or counterterrorism financing. They might need to verify the identities of those involved with the transaction before releasing the funds.
The final common reason for an eCheck hold involves unusual activity. If the money is more considerable than what is usually available, then access might be restricted until the transaction completes this verification process.
What Can I Do If PayPal Rejects an eCheck?
If PayPal rejects an eCheck, it could be due to several reasons, such as insufficient funds in the sender’s bank account, incorrect bank account information, or issues with the sender’s profile.
Here are the steps you can take if you expect an eCheck that PayPal rejects after investigating.
1. Contact the Sender
If PayPal has rejected an eCheck payment, you should first contact the sender to ask if they can send the money again. You can also check with them if the bank account information was entered correctly.
2. Wait for the eCheck to Clear
If the eCheck was rejected due to insufficient funds, you might need to wait for the sender to deposit more funds into their account. Once the money is available, the sender can resend the payment.
3. Add a Backup Payment Method
If you frequently receive payments via eCheck and want to avoid delays, you can add a backup payment method to your PayPal account, such as a credit card or a bank account.
That way, if an eCheck payment is rejected, PayPal can automatically charge the backup payment method.
4. Review the Currency
If the eCheck was sent in a different currency than the one in your PayPal account, the platform might charge a currency conversion fee when returning the funds to the sender’s account.
Additionally, if the eCheck was sent using a credit card, PayPal may charge a fee for the refund, which is typically a percentage of the transaction amount.
5. Contact PayPal Support
When an eCheck doesn’t clear, you can contact PayPal’s customer support for help. Their representatives can provide you with more information on why the eCheck was rejected and help you resolve the issue.
How Soon Can I Spend an eCheck Sent to PayPal?
Most eChecks typically clear in three business days. You’ll see the status change from “pending” when this occurs.
The policies of your bank and PayPal can impact how long it takes for the money to clear.
Once the eCheck has cleared, the funds will be added to your PayPal balance, and you can use them to make purchases, send money to others, or withdraw the funds to your bank account.
Please remember that some merchants may place a hold on your purchase until the eCheck clears, so it’s always a good idea to check with the merchant to confirm their policies on eCheck payments.
Can I Pursue the eCheck Sender for the Fees I’m Charged?
If you are charged fees for a rejected eCheck, you can pursue the sender for reimbursement, depending on the circumstances of the transaction and the agreement you have with them.
There are a few factors to consider, and it is essential to remember that every situation is unique. Generally, you have three points to review if you’re trying to recover the fees you’re charged from a pending eCheck that is eventually rejected.
Suppose the eCheck was rejected due to an error or issue on the sender’s part, such as insufficient funds or incorrect account information. In that case, you might be able to pursue the sender to reimburse any fees you incurred because of the rejection.
When a contract or purchase agreement specifies who is responsible for fees and charges, you can refer to the terms and conditions to determine whether you can pursue the sender for reimbursement.
If you cannot resolve the issue with the eCheck sender directly, you can pursue legal recourse through small claims court or other legal channels.
You should also review PayPal’s policies and any agreements you have with the sender to determine your rights and options for reimbursement.
Are Direct Deposits Treated as eChecks by PayPal?
Direct deposits are not treated as eChecks by PayPal. It is a separate payment method that allows funds to be transferred directly from one bank account to another.
In the context of PayPal, direct deposit is typically used for adding funds to your account from a personal or business bank account.
Direct deposits are typically processed more quickly than eChecks, and the funds are usually available for spending in the PayPal account within a few hours. However, this can vary depending on your bank’s processing times. Unlike eChecks, they do not require the same authorization and verification process since they are initiated by the account holder.
That means they do not need to be authorized by PayPal.
What If My eChecks Aren’t Clearing Consistently?
PayPal generally releases funds after they are verified, which can be as little as 24 to 48 hours after the transaction’s initiation. If the payer has money available in their account, the clearance is three to five business days in most situations, allowing the cash to move into the payee’s account.
I’ve found that the easiest way to manage pending eChecks in PayPal is to wait out the process. Most holds are released within a few days, allowing the money to become available in your account.
If the payment is still pending after a few days and you’re still trying to figure out why, you can contact PayPal’s customer support for assistance. They can help you identify the reason for the hold and provide guidance on what to do next.
You can initiate a change to the payment status by canceling it while still in a pending status. This action could result in fees or charges, so it is best used when there is a sender payment error to manage.
The eCheck clearance process is like what it is for paper checks and other ACH transactions. With a bit of patience, you should have access to your money soon.
