Newport International Group Corporate Travel: E-checks are handy, but are they a safe way to pay for travel?

The benefits to companies are obvious: They avoid paying any fees associated with credit
cards and they receive the customer’s money right away, deposited directly into their
merchant bank. But consumers have an advantage, too, at least according to companies like
Viking.
“Guests who pay via e-check receive a discount of two percent, which reflects a savings that
Viking passes on to the guest by not having to pay a fee to a credit card company,” says Viking
spokesman Ian Jeffries. He says that the company also recommends payment via e-check as an
alternative to a credit card so that you can avoid any interest rates or fees that some credit
card companies may charge.
Viking is hardly alone. One recent study found that a quarter of airlines worldwide offer some
form of alternative electronic payment option. As companies try to escape the high merchant
fees charged by credit cards, these payment choices are bound to become more common in
the near future.
“Conventionally, the discounted pay-by-e-check transactions are processed through the
traveler’s bank, given the customer’s bank routing numbers and checking or savings account
numbers,” says Oliver McGee, a former U.S. deputy assistant secretary of transportation for
technology policy and a professor at Howard University.
E-checks come in two basic flavors: Check21 electronic payment processing, which is more
flexible but also more expensive, and the more restricted ACH wire deposit payments, which
are commonly used for handling direct deposits for employees and for paying bills.
As a practical matter, setting up an e-check involves giving the travel company basic bank
information, typically gained through the bank’s routing numbers, as well as your account
number, and authorizing the transaction.
But you also sacrifice something when you’re paying with an e-check. As with paper checks,
once the money is deposited into the company’s account, your ability to reverse the charges is
limited. Your right to dispute an e-check travel purchase is governed by the ACH or Check21
terms and conditions as well as the electronic fraud protection conditions of your financial
institution.
By comparison, a credit card purchase is protected by federal law under the Fair Credit Billing
Act, which, among other things, lets you dispute charges for products you didn’t accept or that
weren’t delivered as agreed, and which can quickly fix a billing error.
“You have more leeway to dispute a purchase made with a credit card,” says David Bakke, who
edits the personal finance Web site Money Crashers (www.moneycrashers.com).