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

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

As she paged through Viking River Cruises' glossy brochure One recent afternoon, Diane Moskal noticed a new way to save money: If she booked the Waterways of the Tsars itinerary sailing from Moscow to St. Petersburg with something called an e-check , the cruise line promised to knock $ 100 off the fare.

An e-check is an electronic debit to your checking account, and it's billed as a quick, convenient way to pay for your vacation thats "as easy as providing your credit card number," According to Viking.

But like any smart traveler, Moskal was not content with That explanation. "I not see that the cruise lines lawyer consumer savings if you pay by e-check, "she says. But she found several at usefull complaints online, All which made ​​her, hesitate. She wondered: Are e-checks safe?

Axis airlines, hotels and cruise lines offering new ways to pay for Their products, Moskal's question resonates across the entire travel industry . On several airlines,-including American, Southwest and United, you can book a ticket through PayPal. Virgin Galactic made ​​a splash late last year when it Announced That it would accept Bitcoin for its space flights. One hostel in San Francisco, the Pacific Tradewinds, famously offering a 30 percent discount to guests who pay with the digital currency.

Newport International Group Corporate Travel

While Viking River's e-check option Is not new - it's been available since 2008 - the concerns raised by Moskal and others are. It turns out thatthere are several at important differences between paying by e-check and paying by credit card. And given the popularity of new electronic payment choices, it's a good time to understand how they work.

Americans made 22.1 billion electronic payments using options zoals e-checks in 2012, the most recent year for All which numbers are available, accordion thing to a recent Federal Reserve study. The number of transactions grew at an annual rate of 5.1 percent from 2009 to 2012, the Fed reports. By comparison, consumers Conducted 26.2 billion credit card transactions in 2012, and those numbers grew at a somewhat faster 7.6 percent annual rate.

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 accordion thing to companies like Viking.

"Guests who pay by e-check receive a discount of two percent, All 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 saysthat the company usefull 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 charge May.

Viking is Hardly alone. One recent study found That a quarter of worldwide airlines offer some form of alternative electronic payment option. Ashes companies try to escape the high merchant fees charged by credit cards, payment choices thesis are bound to become more common in the near future.

"Conventionally, the discounted pay-by-e-check transactions are processed through the traveler's bench, 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 more expensive usefull, and the more restricted deposit ACH wire payments, All which are comm only 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 banking information, Typically gained through the Bank's routing numbers, as well as your account number, and Authorizing the transaction.

But you sacrifice something usefull when you're paying with an e-check. Axis 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 or your financial institution.

By comparison, a credit card purchase is protected by federal law under the Fair Credit Billing Act, All which, among other things, lets you dispute charges for products you did not accept or that were not delivered as agreed, and All 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).

If an e-check booking goes wrong - say, for example, that your cruise line files for bankruptcy protection and you want a refund - You May lose your money. Bakke saysthat e-checks can be reversed in only three cases: if you did not Authorize the purchase, if the e-check was processed on a date Earlier than Authorized or if the amount of the processed transaction is different from what was Authorized . Otherwise, the money is as good as gone.

While complaints about e-checks are rare, grievances with companies over wired money Appear to be Increasingly common. Ask was not a week seems to go by someone That does not help me to retrieve money That leg wired to a company or an individual. These transactions are difficultness, if not impossible, to undo. Generally, if you're dealing with a small local company or an individual, you can kiss the cash goodbye.

After I explained the differences in payment methods to Moskal, she consulted her travel agent who booked her on the Viking riverboat cruise to Russia this fall. "She never raised the question of paying by anything other than credit card," says Moskal.