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In the US, PayPal offers three way of linking a bank account with a PayPal account: eCheck, ACH, and Debit Card.

When payments are sent using the Debit Card method, a fee is applied because of the networks' fees. ACH is free and sends the money instantly (though it takes about 24 hours for the txn to appear on my online banking statement). I don't understand the eCheck system, however.

I understand the Debit card network and I loosely understand the ACH system - but what is an eCheck? I have a sinking feeling that this involves PayPal generating a fake picture of a cheque for the amount required, printing it, digitally photographing it, and using the photographic-cheque deposit system (I don't know how that works either).

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So apparently ACH and eCheck are interchangeable. The confusion arises from PayPal's ambiguous use of terminology.

According to this thread ( https://www.paypal-community.com/t5/Sending-money-Archive/how-do-i-change-from-a-echeck-to-an-instant-payment/td-p/92459 ) the payment process PayPal takes is a bit complicated, but if you try to send money to another person via PayPal:

  • If you have your Bank account connected (by Routing Number and Account Number) and you have a Credit or Debit card set-up as an "Alternative source of funds" then PayPal will make an eCheck pull from your account (which will still take 3-5 days), but PayPal will send the money immediately (i.e. taking on some risk) because it can use your cards on file as a fallback of the eCheck fails (In the event they do fallback to the card I don't know if PayPal accepts the card payment fee or charges it to the sender).
  • If you have your Bank account connected (by Routing Number and Account Number) and you don't have a Credit or Debit card set-up as an "Alternative source of funds" , then PayPal will make an eCheck pull from your account and wait for the money to clear at their end before making the onward payment to the recipient.
  • If you only have a credit or debit card set-up in your account, then the transfer to the recipient will be instant, but you'll be charged a card transaction fee.

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