As filed with the Securities and
Exchange Commission on January 16, 2004.             Registration No. 333-110297

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                 AMENDMENT NO. 2

                                       TO

                                    FORM S-3
                             REGISTRATION STATEMENT
                                      UNDER
                           THE SECURITIES ACT OF 1933

                         ELECTRONIC CLEARING HOUSE, INC.
             (Exact Name of Registrant as Specified in Its Charter)

             NEVADA                                              93-0946274
  (State or Other Jurisdiction                                (I.R.S. Employer
of Incorporation or Organization)                            Identification No.)

                               730 PASEO CAMARILLO
                           CAMARILLO, CALIFORNIA 93010
                                  800-233-0406
                                WWW.ECHO-INC.COM
    (Address, Including Zip Code, and Telephone Number, Including Area Code,
                  of Registrant's Principal Executive Offices)

                                  JOEL M. BARRY
                             CHIEF EXECUTIVE OFFICER
                               730 PASEO CAMARILLO
                           CAMARILLO, CALIFORNIA 93010
                                  800-233-0406
                                WWW.ECHO-INC.COM
       (Name, Address, Including Zip Code, and Telephone Number, Including
                        Area Code, of Agent for Service)

                                   COPIES TO:
                             V. Joseph Stubbs, Esq.
                         Stubbs Alderton & Markiles, LLP
                       15821 Ventura Boulevard, Suite 525
                            Encino, California 91436
                                 (818) 444-4500

         APPROXIMATE  DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  From
time to time after the effective date of this Registration Statement.
         If the only  securities  on this form are  being  offered  pursuant  to
dividend or interest reinvestment plans, please check the following box. [_]
         If any of the  securities  being  registered  on  this  form  are to be
offered  on a  delayed  or  continuous  basis  pursuant  to Rule 415  under  the
Securities Act of 1933,  other than  securities  offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
         If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list  the  Securities  Act  registration  statement  number  of the  earlier
effective registration statement for the same offering. [_]
         If this  Form is a  post-effective  amendment  filed  pursuant  to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  registration
statement for the same offering. [_]
         If the delivery of the  prospectus  is expected to be made  pursuant to
Rule 434, please check the following box. [_]

     THE REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME UNTIL THE REGISTRANT SHALL
FILE A FURTHER  AMENDMENT  WHICH  SPECIFICALLY  STATES  THAT  THIS  REGISTRATION
STATEMENT SHALL  THEREAFTER  BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE  SECURITIES  ACT OF 1933 OR UNTIL THE  REGISTRATION  STATEMENT  SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION,  ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

================================================================================






                    SUBJECT TO COMPLETION - JANUARY 16, 2004


                                   PROSPECTUS

                         ELECTRONIC CLEARING HOUSE, INC.

                         437,957 SHARES OF COMMON STOCK
                                ($0.01 par value)

                                   ----------


         This  prospectus  relates  to the  offer  and sale from time to time of
437,957  shares of our common stock that are held by the  stockholders  named in
the "Selling Stockholders" section of this prospectus.  The shares of our common
stock offered pursuant to this prospectus were originally  issued to the selling
stockholders in a private placement financing transaction.

         The  prices at which the  selling  stockholders  may sell the shares in
this offering will be determined by the  prevailing  market price for the shares
or in negotiated transactions.  We will not receive any of the proceeds from the
sale of the  shares.  We will bear all  expenses  of  registration  incurred  in
connection with this offering.  The selling  stockholders whose shares are being
registered will bear all selling and other expenses.


         Our common  stock is traded on the NASDAQ  SmallCap  Stock Market under
the symbol  "ECHO." On January 13,  2004,  the last  reported  sale price of the
common stock on the NASDAQ SmallCap Stock Market was $11.74 per share.

         SEE  "RISK  FACTORS"  BEGINNING  ON PAGE 6 TO READ  ABOUT THE RISKS YOU
SHOULD CONSIDER CAREFULLY BEFORE BUYING SHARES OF OUR COMMON STOCK.


                                   ----------

         Neither the Securities and Exchange Commission nor any state securities
commission has approved or  disapproved  of these  securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.

                                   ----------

                  The date of this prospectus is ______________





                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----

PROSPECTUS SUMMARY.............................................................3

RISK FACTORS...................................................................6

FORWARD-LOOKING STATEMENTS....................................................12

USE OF PROCEEDS...............................................................12

SELLING STOCKHOLDERS..........................................................13

PLAN OF DISTRIBUTION..........................................................15

WHERE YOU CAN FIND MORE INFORMATION...........................................17

LEGAL MATTERS.................................................................18

EXPERTS.......................................................................18



                                       2



                               PROSPECTUS SUMMARY

ABOUT ELECTRONIC CLEARING HOUSE, INC.


         Electronic Clearing House, Inc. is an electronic payment processor that
provides for the payment  processing  needs of merchants,  banks and  collection
agencies.  We  derive  the  majority  of our  revenues  from two  main  business
segments,  bankcard  and  transaction  processing  services,  whereby we provide
solutions to merchants  and banks to allow them to accept  credit and debit card
payments from consumers, and check-related products,  whereby we provide various
services  to  merchants  and banks to allow  them to accept  and  process  check
payments  from  consumers.  The  principal  services we offer  within  these two
segments include the following:

         With respect to our bankcard and transaction processing services:

         o        Debit and credit card processing; and
         o        U-Haul transaction processing.

         With respect to our check-related products:

         o        Check  verification  - where,  prior to approving a check,  we
                  search our  negative and  positive  check  writer  database to
                  determine  whether the check  writer has  current,  delinquent
                  check-related debts;
         o        Electronic  check conversion - the conversion of a paper check
                  at the point of sale to a direct bank debit which is processed
                  for settlement  through the Federal Reserve System's Automated
                  Clearing  House,  or ACH,  network.  The ACH is the electronic
                  banking network  through which all electronic  funds transfers
                  are made in the United States;
         o        Check guarantee - where, if we approve a check transaction and
                  a check is subsequently dishonored by the check writer's bank,
                  the merchant is reimbursed by us;
         o        Check  re-presentment  - where we  attempt to clear a check on
                  multiple  occasions via the ACH network prior to returning the
                  check to the  merchant so as to increase the number of cleared
                  check transactions; and
         o        Check  collection - where we provide national scale collection
                  services for a merchant or bank.

         We operate our services under the following brands:

         o        MerchantAmerica,  our retail  provider  of payment  processing
                  services to both the merchant and bank markets;
         o        National Check Network,  or NCN, our  proprietary  database of
                  negative and  positive  check  writer  accounts,  for back-end
                  check  verification,  check  authorization  and check  capture
                  services, and for membership to collection agencies.  Negative
                  check  writer  accounts  typically  identify a check  writer's
                  delinquent  history  in the form of  non-sufficient  funds and
                  other negative transactions; and
         o        XPRESSCHEX,   Inc.  for  retail  check   verification,   check
                  conversion,   Automated   Clearing   House   services,   check
                  collection and check guarantee services.


         Overall,  our  ability to  program  and  oversee  the  management  of a
merchant's point of sale system,


                                       3



provide credit card and debit card  processing,  provide multiple check services
for the processing of checks, provide both electronic and traditional collection
services, and fully integrate all of these services into a single internet-based
reporting  capability  allows us to  provide  for the  majority  of the  payment
processing needs of our customers.

         Our  strategy  is to  provide  merchants,  banks and  industry-specific
resellers with electronic connectivity to various payment services in the credit
card,  debit card and  check-related  markets.  With more than  twenty  years of
experience, we have a history of providing reliable, customer-focused service to
national merchants. Our platform of services is very flexible, enabling merchant
customization  and  scalability  to meet the  requirements  of high  transaction
volumes,  as well as access to the Visa POS Check Service  Program,  a major new
initiative by Visa to enable  merchants to receive  direct online  authorization
for  checks  written  against  consumer  checking   accounts,   similar  to  the
authorizations  provided  for credit and debit card  transactions.  Our services
enable  merchants  to maximize  revenues  by offering a wide  variety of payment
options,  reducing the costs  associated  with  processing and handling  checks,
improving collections and managing risk more effectively.

         While  we  currently  have  little  market  share  in the  credit  card
processing market, we are one of the top 50 credit card processors  according to
THE  NILSON  REPORT,   a  monthly   financial   subscription-based   newsletter.
Additionally, we believe we hold a significant competitive position in the check
services market due to our ownership of the NCN database,  our integrated set of
check  and  collection  services  and  the  technological  advantage  of  having
certified in the early stages of the Visa POS Check Service Program.

         During the year ended  September 30, 2003, our total revenue  increased
22.1% to  $40,636,000,  up from  $33,291,000  in fiscal  2002.  The increase was
primarily  attributable to the growth of our bankcard and transaction processing
business, which grew organically as a result of the efforts of our various sales
channels,  including direct sales and sales from our authorized  resellers.  Our
bankcard and  transaction  processing  revenue for fiscal 2003 increased  18.2%,
from   $27,456,000   in  fiscal  2002,  to   $32,444,000  in  fiscal  2003.  Our
check-related  revenues also increased in fiscal 2003, from $5,835,000 in fiscal
2002 to  $8,192,000,  an  increase  of 40.4%.  This was  attributable  to a 9.8%
increase  in check  verification  revenue,  from  $2,821,000  in fiscal  2002 to
$3,097,000 in fiscal 2003, and a 246.0% increase in electronic  check conversion
and  electronic  check  presentation  revenue,  from  $836,000 in fiscal 2002 to
$2,892,000 in fiscal 2003,  whose growth was in large part due to the increasing
market acceptance of these products.


         We had a net loss in fiscal  2003 of  $3,379,000,  as compared to a net
loss of  $2,376,000  for fiscal  2002.  The  higher net loss in fiscal  2003 was
primarily due to a $4.7 million  goodwill  write-off in October 2002. All of our
goodwill related to business  acquisition  transactions which occurred in fiscal
years 1999 and 2000 in our check-related  products business segment.  Subsequent
to  the  1999  and  2000  acquisition  transactions,   the  fair  value  of  the
check-related products business unit declined significantly. On October 1, 2002,
we adopted Statement of Financial Accounting Standards Number 142, "Goodwill and
Other Intangible  Assets" (SFAS 142) which required that goodwill  impairment be
assessed and  measured on the basis of the fair value of the business  reporting
units to which the goodwill applies.  In performing the transitional  impairment
testing  required by SFAS 142, we concluded that our goodwill was fully impaired
due to the decline in fair value of the check-related  products business segment
and accordingly  recorded the $4.7 million goodwill  write-off as the cumulative
effect of the change in accounting principle.

         Income from operations improved  substantially in the 2003 fiscal year,
from a  $3,669,000  operating  loss in fiscal 2002 to  $2,425,000  in  operating
income for fiscal 2003. The improvement in income from operations between fiscal
2002 and fiscal  2003  resulted  from the  following:  (1) a 22.1%  increase  in
revenue;  (2) a 3.8%  improvement  in  gross  margins;  (3) the  elimination  of
$489,000 in


                                       4



goodwill  amortization  expense;  and (4) the absense of a one-time $2.5 million
legal settlement cost which was incurred in fiscal 2002.


CORPORATE INFORMATION

         We were  incorporated in Nevada in December 1981. Our executive offices
are  located  at 730  Paseo  Camarillo,  Camarillo,  California  93010,  and our
telephone   number   is   (800)   233-0406.    Information   on   our   website,
www.echo-inc.com, does not constitute part of this prospectus.

ABOUT THE OFFERING

         This  prospectus may be used only in connection  with the resale by the
selling stockholders of 437,957 shares of our common stock.


         We will not receive any proceeds  from the sale of the shares of common
stock offered by the selling stockholders using this prospectus.  On January 13,
2004, we had 6,339,562 shares of common stock outstanding.



                                       5



                                  RISK FACTORS

         YOU SHOULD CAREFULLY  CONSIDER THE FOLLOWING RISKS BEFORE YOU DECIDE TO
BUY OUR  COMMON  STOCK.  THE RISKS  AND  UNCERTAINTIES  DESCRIBED  BELOW ARE THE
MATERIAL ONES FACING OUR COMPANY.  IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR,
OUR BUSINESS,  FINANCIAL CONDITION OR RESULTS OF OPERATIONS WOULD LIKELY SUFFER.
IF THIS OCCURS, THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY
LOSE ALL OR PART OF THE MONEY YOU PAID TO BUY OUR COMMON STOCK.

RISKS RELATED TO OUR BUSINESS
-----------------------------

WE RELY ON  COOPERATIVE  RELATIONSHIPS  WITH,  AND  SPONSORSHIP  BY, BANKS,  THE
ABSENCE OF WHICH MAY AFFECT OUR OPERATIONS.

We currently rely on cooperative  relationships  with, and sponsorship by, banks
in order to process our Visa,  MasterCard  and other bankcard  transactions.  We
also rely on several  banks for access to the Automated  Clearing  House ("ACH")
for  submission  of  both  credit  card  and  check  settlements.   Our  banking
relationships  are  currently  with  smaller  banks  (with  assets  of less than
$500,000,000).  Even though smaller banks tend to be more susceptible to mergers
or acquisitions and are therefore less stable,  these banks find the programs we
offer more attractive and we believe we cannot obtain similar relationships with
larger  banks  at  this  time.  A  bank  could  at any  time  curtail  or  place
restrictions on our processing  volume because of its internal business policies
or due to other adverse circumstances.  If a volume restriction is placed on us,
it could materially  adversely affect our business operations by restricting our
ability to process credit card transactions and receive the related revenue. Our
relationships  with our customers and merchants would also be adversely affected
by our inability to process these transactions.

We  currently   maintain  one  primary   bankcard   processing  and  sponsorship
relationship with First Regional Bank in Agoura Hills, California. Our agreement
with First Regional Bank continues through 2005. Additionally, we have reached a
tentative  agreement with Woodforest  Bank in Woodforest,  Texas, to sponsor our
bankcard  activity.  Once  finalized,  we expect this  agreement  will  continue
through 2009. We also maintain several banking relationships for ACH processing.
While we believe our current bank relationships are sound, we cannot assure that
these banks will not restrict our increasing  processing  volume or that we will
always  be able  to  maintain  these  relationships  or  establish  new  banking
relationships.  Even if new banking relationships are available, they may not be
on terms  acceptable to us. With respect to First  Regional Bank and  Woodforest
Bank,  while we believe their  respective  ability to terminate  our  respective
relationships is  cost-prohibitive,  they may  independently  determine that the
cost of  terminating  their  agreements  is less than the cost of  continuing to
perform in accordance with their terms, and may therefore determine to terminate
those agreements prior to their expiration.  Ultimately, our failure to maintain
these banking  relationships and sponsorships may have a material adverse effect
on our business and results of operations.

MERCHANT FRAUD WITH RESPECT TO BANKCARD AND ACH  TRANSACTIONS  COULD CAUSE US TO
INCUR SIGNIFICANT LOSSES.

We  significantly  rely on the processing  revenue derived from bankcard and ACH
transactions.  If any  merchants  were to  submit  or  process  unauthorized  or
fraudulent  bankcard or ACH transactions,  depending on the dollar amount,  ECHO
could incur significant losses which could have a material adverse effect on our
business and results of operations.  ECHO assumes and compensates the sponsoring
bank for bearing the risk of these types of transactions.


                                       6



We have  implemented  systems and software for the electronic  surveillance  and
monitoring  of  fraudulent  bankcard and ACH use. As of September  30, 2003,  we
maintained  a dedicated  chargeback  reserve of  $603,000  at our  primary  bank
specifically earmarked for such activity.  Additionally,  through our sponsoring
bank, we had access to approximately  $9.2 million in merchant deposits to cover
any potential  chargeback losses.  Despite a long history of managing such risk,
we cannot guarantee that these systems will prevent fraudulent transactions from
being  submitted  and  processed  or that the funds set  aside to  address  such
activity will be adequate to cover all potential situations that might occur. We
do not have  insurance  to protect us from these  losses.  There is no assurance
that our chargeback  reserve will be adequate to offset against any unauthorized
or fraudulent processing losses that we may incur. Depending on the size of such
losses, our results of operations could be immediately and materially  adversely
affected.

FAILURE TO PARTICIPATE  IN THE VISA POS CHECK SERVICE  PROGRAM WOULD CAUSE US TO
SIGNIFICANTLY SHIFT OUR OPERATING AND MARKETING STRATEGY.

We have  significantly  increased  our  infrastructure,  personnel and marketing
strategy to focus on the potential growth of our check services through the Visa
POS Check Service Program. We currently provide critical back-end infrastructure
for the service,  including our NCN database for  verification and our access to
the Federal Reserve System's Automated Clearing House for funds settlement,  for
checks written on bank accounts with banks not participating in the program.

Because we believe the market will  continue to gain  acceptance of the Visa POS
Check  Service  Program,  we have expended  significant  resources to market our
check  conversion  services and  verification  services to our merchant base, to
solidify our strategic  relationships  with the various  financial  institutions
that have chosen us as their acquirer processor and third-party  processor under
the  program,  and to sell our other check  products  such as  electronic  check
re-presentments  and check  guarantee  to the Visa  member  banks.  We have also
increased our personnel to handle the increased  volume of transactions  arising
directly from our participation in the program.

If we fail to adequately  market our services  through this  relationship,  this
could materially affect our marketing strategy going forward.  Additionally,  if
we fail to adequately grow our infrastructure to address increases in the volume
of transactions, cease providing services as a third-party processor or acquirer
processor or are  otherwise  removed or terminated  from the VISA Program,  this
would require us to dramatically shift our current operating strategy.

THE BUSINESS IN WHICH WE COMPETE IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE
THAT OUR CURRENT  PRODUCTS AND SERVICES WILL STAY COMPETITIVE OR THAT WE WILL BE
ABLE TO INTRODUCE NEW PRODUCTS AND SERVICES TO COMPETE SUCCESSFULLY.

We are in the business of  processing  payment  transactions  and  designing and
implementing  integrated  systems for our  customers so that they can better use
our services.  This business is highly competitive and is characterized by rapid
technological  change, rapid rates of product  obsolescence,  and rapid rates of
new products  introduction.  Our market share is relatively small as compared to
most of our competitors and most of these  competitors have  substantially  more
financial and marketing resources to run their businesses.  While we believe our
small  size  provides  us the  ability  to  move  quickly  in  some  areas,  our
competitors'  greater  resources  enable them to investigate and embrace new and
emerging  technologies  quickly to respond to changes in customers needs, and to
devote more resources to product and services development and marketing.  We may
face increased  competition in the future and there is no assurance that current
or new  competition  will allow us to keep our customers.  If we lose customers,
our business operations may be materially adversely affected,  which could cause
us to cease our  business  or curtail  our  business  to a point where we are no
longer able to generate sufficient revenues to fund operations. There


                                       7



is no assurance  that our current  products and services  will stay  competitive
with those of our  competitors or that we will be able to introduce new products
and services to compete successfully in the future.

IF WE ARE UNABLE TO PROCESS SIGNIFICANTLY  INCREASED VOLUME ACTIVITY, THIS COULD
AFFECT OUR OPERATIONS AND WE COULD LOSE OUR COMPETITIVE POSITION.

We have built  transaction  processing  systems  for check  verification,  check
conversion, ACH processing,  and bank card processing activities.  While current
estimates regarding increased volume are within the capabilities of each system,
it is possible that a significant increase in volume in one of the markets would
exceed a  specific  system's  capabilities.  To  minimize  this  risk,  ECHO has
redesigned and upgraded its check related processing systems and has purchased a
high  end  system  to  process  bankcard  activity.   This  system  is  not  yet
operational,  and even when it becomes  operational,  no assurance  can be given
that the  current  systems  would be able to handle a  significant  increase  in
volume or that the operational  enhancements and improvements  will be completed
in such time to avoid  such a  situation.  In the event we are unable to process
increases  in volume,  this could  significantly  adversely  affect our  banking
relationships, our merchant customers, and our overall competitive position, and
could  potentially  result in violations of service level agreements which would
require us to pay penalty fees to the other parties to those agreements.  Losses
of such relationships,  or the requirement to pay penalties, may severely impact
our results of operations and financial condition.

WE INCUR FINANCIAL RISK FROM OUR CHECK GUARANTEE SERVICE.

The check  guarantee  business is essentially a risk  management  business.  Any
limitation  of a risk  management  system could result in financial  obligations
being incurred by ECHO relative to our check guarantee activity.  While ECHO has
provided check guarantee  services for several years,  there can be no assurance
that our current  risk  management  systems are  adequate to assure  against any
financial loss relating to check  guarantee.  ECHO is enhancing its current risk
management  systems and it is being  conservative  with reference to the type of
merchants to which it offers  guarantee  services in order to minimize this risk
but no assurance can be given that such  measures  will be adequate.  During the
year ended September 30, 2003, we incurred  $206,000 in losses from  uncollected
guaranteed checks.

SECURITY BREACHES COULD IMPACT OUR CONTINUED OPERATIONS.

We process  confidential  financial  information and maintain  several levels of
security  to  protect  this  data.   Security   includes  hand  and   card-based
identification  systems at our data center locations that restrict access to the
specific   facilities,   various  employee  monitoring  and  access  restriction
policies,  and  various  firewall  and  network  management  methodologies  that
restrict  unauthorized  access  through the  Internet.  While these systems have
worked  effectively  in the  past,  there  can be no  assurance  that  they will
continue to operate without a security breach in the future.  Depending upon the
nature of the breach, the consequences of security breaches could be significant
and dramatic to ECHO's continued operations.

THE INDUSTRY IN WHICH WE OPERATE INVOLVES  RAPIDLY  CHANGING  TECHNOLOGY AND OUR
FAILURE TO IMPROVE  OUR  PRODUCTS  AND  SERVICES  OR TO OFFER NEW  PRODUCTS  AND
SERVICES COULD CAUSE US TO LOSE CUSTOMERS.

Our business industry involves rapidly changing  technology.  Recently,  we have
observed   rapid  changes  in  technology  as  evidenced  by  the  Internet  and
Internet-related services and applications,  new and better software, and faster
computers and modems. As technology changes,  ECHO's customers desire and expect
better products and services.  Our success depends on our ability to improve our
existing  products  and  services  and to develop  and market new  products  and
services.  The  costs and  expenses  associated  with  such an  effort  could be
significant  to us. There is no assurance that we will be able to find the funds
necessary  to keep up with new  technology  or that if such funds are  available
that  we  can  successfully


                                       8



improve our existing products and services or successfully  develop new products
and  services.  Our failure to provide  improved  products  and  services to our
customers or any delay in providing such products and services could cause us to
lose  customers  to our  competitors.  Loss of  customers  could have a material
adverse effect on ECHO.

OUR  INABILITY  TO PROTECT OR DEFEND OUR TRADE  SECRETS  AND OTHER  INTELLECTUAL
PROPERTY COULD HURT OUR BUSINESS.

We have expended a considerable  amount of time and money to develop information
systems for our merchants.  We regard these information systems as trade secrets
that are extremely  important to our payment processing  operations.  We rely on
trade secret  protection  and  confidentiality  and/or license  agreements  with
employees,  customers, partners and others to protect this intellectual property
and have not otherwise taken steps to obtain  additional  intellectual  property
protection  or other  protection  on these  information  systems.  We  cannot be
certain that we have taken adequate steps to protect our intellectual  property.
In addition, our third-party  confidentiality agreements can be breached and, if
they are,  there may not be an  adequate  remedy  available  to us. If our trade
secrets become known, we may lose our competitive  position,  including the loss
of our  merchant  and bank  customers.  Such a loss  could  severely  impact our
results of operations and financial condition.

Additionally,  while we believe that the technology  underlying our  information
systems  does not  infringe  upon the rights of any third  parties,  there is no
assurance that third parties will not bring  infringement  claims against us. We
also have the right to use the  technology  of others  through  various  license
agreements.  If a third party claimed our activities  and/or these licenses were
infringing  their  technology,  while we may have some protection from our third
party licensors,  we could face additional  infringement  claims or otherwise be
obligated to stop  utilizing  intellectual  property  critical to our technology
infrastructure.  If we are not able to implement other  technology to substitute
the intellectual  property  underlying a claim, our business operations could be
severely effected.  Additionally,  infringement claims would require us to incur
significant defense costs and expenses and, to the extent we are unsuccessful in
defending these claims,  could cause us to pay monetary damages to the person or
entity making the claim.  Continuously having to defend such claims or otherwise
making monetary damages  payments could materially  adversely affect our results
of operations.

IF WE DO NOT CONTINUE TO INVEST IN RESEARCH AND  DEVELOPMENT,  WE COULD LOSE OUR
COMPETITIVE POSITION.

Because technology in the payment processing  industry evolves rapidly,  we need
to  continue  to  invest  in  research  and  development  in both  the  bankcard
processing  business segment and the check-related  products segment in order to
remain competitive.  Although research and development  expenses decreased 18.3%
from $1,719,000 in fiscal 2002 to $1,405,000 in fiscal 2003, because of the fact
that most of our development project costs were capitalized once we entered into
coding and testing  phases,  we continue to evaluate  projects  which we believe
will assist us in our efforts to stay competitive.  Although we believe that our
investment in these  projects will  ultimately  increase  earnings,  there is no
assurance as to when or if these new products will show  profitability  or if we
will ever be able to recover the costs invested in these projects. Additionally,
if we fail to commit  adequate  resources  to grow our  technology  on pace with
market growth,  we could quickly lose our  competitive  position,  including the
loss of our merchant and bank customers.

FAILURE TO OBTAIN ADDITIONAL FUNDS CAN IMPACT OUR OPERATIONS AND FUTURE GROWTH.

We use funds generated from operations, as well as funds obtained through credit
facilities  and equity  financing,  to finance our  operations.  In light of our
recent  financing  efforts,  and as a result  of the cash  flow  generated  from
operations,  we  believe  we  have  sufficient  cash  to  support  our  business
activities,


                                       9



including research,  development and marketing costs. However, future growth may
depend on our ability to  continue to raise  additional  funds,  either  through
operations, bank borrowings, or equity or debt financings. There is no assurance
that we will be able to continue to raise the funds  necessary to finance growth
or continue to generate the funds necessary to finance  operations,  and even if
such funds are available, that the terms will be acceptable to us. The inability
to generate the  necessary  funds from  operations  or from third parties in the
future  may  require  us to scale  back our  research,  development  and  growth
opportunities, which could harm our overall operations.

WHILE WE MAINTAIN  INSURANCE  PROTECTION AGAINST CLAIMS RELATED TO OUR SERVICES,
THERE IS NO ASSURANCE THAT SUCH  PROTECTION  WILL BE ADEQUATE TO COVER POTENTIAL
CLAIMS AND OUR INABILITY TO OTHERWISE PAY SUCH CLAIMS COULD HARM OUR BUSINESS.

We maintain errors and omissions insurance for the services we provide. While we
believe the limit on our errors and omissions  insurance  policy is adequate and
consistent  with  industry  practice,  if claims are brought by our customers or
other third  parties,  we could be required  to pay the  required  claim or make
significant  expenditures  to defend  against such claims in amounts that exceed
our current  insurance  coverage.  There is no  assurance  that we will have the
money to pay  potential  plaintiffs  for such  claims if they  arise  beyond the
amounts  insured by us.  Making  these  payments  could have a material  adverse
effect on our business.

INVOLVEMENT IN LITIGATION COULD HARM OUR BUSINESS.

We are involved in various  lawsuits arising in the ordinary course of business.
Although we believe that the claims asserted in such lawsuits are without merit,
the cost to us for the fees and  expenses to defend such  lawsuits  could have a
material  adverse  effect on our financial  condition,  results of operations or
cash flow. In addition,  there can be no assurance that we will not at some time
in the future experience  significant  liability in connection with such claims.
As of September 30, 2003, we have spent approximately  $50,000 in legal fees and
expenses defending these claims.

Litigation   costs  and  expenses,   including   the  cost  to  settle   claims,
significantly affected our results of operations during the year ended September
30, 2002. Net loss for fiscal 2002 was $2,376,000,  as compared to net income of
$434,000 in fiscal 2001.  The decline was  primarily due to a $2.5 million legal
settlement  paid to  Premiere  Lifestyles  International  Corporation,  Inc.  In
connection with the settlement, we made a one-time cash payment of $1,200,000 to
Premier and executed a long-term  promissory note  collateralized  by our Agoura
Hills,  California  office building in favor of that plaintiff for an additional
$1,300,000, payable over 15 years, with an interest rate of 8%. Additionally, we
incurred  approximately  $1,000,000 in legal fees in connection with the suit of
which $400,000 was incurred in fiscal 2002.

OUR INABILITY TO RECOVER FROM NATURAL DISASTERS COULD HARM OUR BUSINESS.

We currently maintain four data centers: one in Agoura Hills, California, one in
Camarillo,  California,  one in  Albuquerque,  New  Mexico  and one in  Boulder,
Colorado.  Should  a  natural  disaster  occur  in any of the  locations,  it is
possible that ECHO would not be able to fully recover full  functionality at one
of its data  centers.  To  minimize  this risk,  ECHO will  centralize  its data
processing  functionality in Camarillo in 2004 and will make Albuquerque a fully
redundant  site.  Prior to that time,  it is possible a natural  disaster  could
limit or completely  disable a specific  service offered by ECHO until such time
that the specific  location  could resume its  functionality.  Our  inability to
provide such service  could have a material  adverse  effect on our business and
results of operations.


                                       10



INCREASES IN THE COSTS OF TECHNICAL COMPLIANCE COULD HARM OUR BUSINESS.

The services which ECHO offers require significant  technical  compliance.  This
includes  compliance to both Visa and  MasterCard  regulations  and  association
rules,  NACHA  guidelines  and  regulations  with regard to the Federal  Reserve
System's  Automated Clearing House and check related issues, and various banking
requirements  and  regulations.  ECHO has personnel  dedicated to monitoring our
compliance  to the specific  industries  we serve and,  when  possible,  ECHO is
moving the technical compliance  responsibility to other parties, as is the case
with the recent purchase of the Oasis  Technologies  bankcard  processing system
wherein  the  vendor,  Oasis  Technologies,   assumes  much  of  the  compliance
obligations  regularly updated by Visa and MasterCard.  As the compliance issues
become more defined in each industry,  the costs associated with that compliance
may  present  a risk to ECHO.  These  costs  could be in the form of  additional
hardware,  software  or  technical  expertise  that  ECHO  must  acquire  and/or
maintain. While ECHO currently has these costs under control, we have no control
over those entities that set the compliance  requirements so no assurance can be
given that ECHO will always be able to  underwrite  the costs of  compliance  in
each industry  wherein we compete.

RISKS ASSOCIATED WITH OUR COMMON STOCK
--------------------------------------

IF WE  NEED TO SELL OR  ISSUE  ADDITIONAL  SHARES  OF  COMMON  STOCK  OR  ASSUME
ADDITIONAL DEBT TO FINANCE FUTURE GROWTH,  OUR STOCKHOLDERS'  OWNERSHIP COULD BE
DILUTED OR OUR EARNINGS COULD BE ADVERSELY IMPACTED.

Our  business  strategy  may  include  expansion  through  internal  growth,  by
acquiring  complementary  businesses or by establishing strategic  relationships
with targeted  customers and suppliers.  In order to do so, or to fund our other
activities,  we may issue  additional  equity  securities  that could dilute our
stockholders'  stock  ownership.  We may also assume  additional  debt and incur
impairment  losses related to goodwill and other  tangible  assets if we acquire
another company and this could negatively  impact our results of operations.  As
of the date of this report,  management has no plan to raise additional  capital
through the sale of securities  and believes that our cash flow from  operations
together with cash on hand and our  established  line of credit with Bank of the
West will be sufficient to meet our working capital and other commitments.

WE HAVE ADOPTED A NUMBER OF ANTI-TAKEOVER MEASURES THAT MAY DEPRESS THE PRICE OF
OUR COMMON STOCK.

Our rights agreement,  our ability to issue additional shares of preferred stock
and some  provisions of our articles of  incorporation  and bylaws could make it
more difficult for a third party to make an unsolicited  takeover attempt of us.
These anti-takeover measures may depress the price of our common stock by making
it more difficult for third parties to acquire us by offering to purchase shares
of our stock at a premium to its market price.

OUR STOCK PRICE HAS BEEN VOLATILE.

Our  common  stock is quoted on the  NASDAQ  SmallCap  Market,  and there can be
substantial  volatility in the market price of our common stock. Over the course
of the quarter ended  September  30, 2003,  the market price of our common stock
has been as high as $9.59,  which is the highest  market  price our common stock
has had over the  course of the year ended  September  30,  2003,  and as low as
$3.20.  Additionally,  over the course of the year ended September 30, 2003, the
market price of our common  stock has been as low as $1.09.  The market price of
our  common  stock  has  been,  and is  likely to  continue  to be,  subject  to
significant  fluctuations  due to a  variety  of  factors,  including  quarterly
variations  in  operating  results,   operating  results  which  vary  from  the
expectations of securities analysts and investors,


                                       11



changes in financial  estimates,  changes in market  valuations of  competitors,
announcements by us or our competitors of a material nature, loss of one or more
customers,  additions or  departures  of key  personnel,  future sales of common
stock and stock  market  price and volume  fluctuations.  In  addition,  general
political  and  economic  conditions  such as a recession,  or interest  rate or
currency rate  fluctuations  may adversely affect the market price of our common
stock.

WE HAVE NOT PAID AND DO NOT CURRENTLY PLAN TO PAY  DIVIDENDS,  AND YOU MUST LOOK
TO PRICE APPRECIATION ALONE FOR ANY RETURN ON YOUR INVESTMENT.

Some  investors  favor  companies that pay  dividends,  particularly  in general
downturns in the stock market.  We have not declared or paid any cash  dividends
on our common  stock.  We  currently  intend to retain any future  earnings  for
funding growth, and we do not currently  anticipate paying cash dividends on our
common stock in the foreseeable future.  Because we may not pay dividends,  your
return on this investment likely depends on your selling our stock at a profit.


                           FORWARD-LOOKING STATEMENTS

         This prospectus  contains  statements  that constitute  forward-looking
statements  within the meaning of Section 27A of the  Securities Act of 1933 and
Section 21E of the Exchange Act of 1934, both as amended.  These forward-looking
statements are subject to various risks and uncertainties.  The  forward-looking
statements include, without limitation, statements regarding our future business
plans and strategies and our future financial position or results of operations,
as well as other statements that are not historical.  You can find many of these
statements  by looking  for words like  "will",  "may",  "believes",  "expects",
"anticipates",  "plans" and  "estimates"  and for similar  expressions.  Because
forward-looking  statements  involve  risks  and  uncertainties,  there are many
factors  that could  cause the actual  results to differ  materially  from those
expressed  or  implied.   These  include,  but  are  not  limited  to,  economic
conditions.   Any  forward-looking  statements  are  not  guarantees  of  future
performance  and  involve  risks and  uncertainties.  Actual  results may differ
materially  from those  projected in this  prospectus,  for the  reasons,  among
others,  described in the Risk Factors  section  beginning on page 4. You should
read the Risk Factors section carefully,  and should not place undue reliance on
any  forward-looking  statements,  which  speak  only  as of the  date  of  this
prospectus.   We  undertake  no  obligation  to  release  publicly  any  updated
information about forward-looking  statements to reflect events or circumstances
occurring  after the date of this  prospectus  or to reflect the  occurrence  of
unanticipated events.


                                 USE OF PROCEEDS

         The proceeds from the sales of the selling  stockholders'  common stock
will  belong to the  respective  selling  stockholders.  We will not receive any
proceeds from such sales.

         In an October 2003  private  placement,  we sold 437,957  shares of our
common  stock  at a  price  per  share  of  $6.85  for  net  proceeds  to  us of
approximately  $2,800,000,  after payment of commissions and expenses,  which we
presently  intend to use to increase  the  capacity  of our  payment  processing
infrastructure,  expedite  various  research and  development  efforts,  and for
general working capital purposes.


                                       12



                              SELLING STOCKHOLDERS

COMMON STOCK FINANCING

         In October  2003,  we entered  into a  securities  purchase  agreement,
pursuant to which we sold shares of our common stock to the following investors:
The Thomas B. Fordham Foundation,  Kentucky State District Council Annuity Trust
Fund,   Kentucky   State  District   Council  of   Carpenters,   Novant  Health,
RaytheonMaster Pension Trust, Raytheon Company Combined DB/DC Master Trust, Rush
Presbyterian  St. Lukes Medical Center  Endowment,  Rush  Presbyterian St. Lukes
Medical Center  Pension,  and William Blair Small Cap Growth Fund. Each investor
is a  selling  stockholder.  Pursuant  to the terms of the  securities  purchase
agreement, we sold to the selling stockholders an aggregate of 437,957 shares of
our  common  stock at a price per share of $6.85  for  gross  proceeds  to us of
approximately $2,800,000, after commissions and expenses.

         Roth Capital  Partners acted as placement  agent in connection with the
October 2003 private  placement  financing  transaction.  For their  services as
placement  agent, we paid Roth Capital  Partners a fee equal to 6%, or $180,000,
of our  gross  proceeds  from the  financing.  We also  paid for the  reasonable
out-of-pocket  expenses  incurred by Roth Capital Partners in an amount equal to
$3,000.00.

REGISTRATION RIGHTS

         In  connection  with  the  October  2003  private  placement  financing
transaction, we entered into a registration rights agreement with the investors.
Pursuant to the registrant  rights  agreement,  we agreed to file a registration
statement on Form S-3  registering  the resale by the investors of the shares of
common stock purchased by them in the  transaction and to keep the  registration
statement  effective  until the  earlier  of two years and the date that all the
common  shares may be sold by the  investors  pursuant  to Rule 144  promulgated
under the  Securities  Act of 1933.  This  registration  rights  agreement  also
provides  that if we do not register for resale the common shares by January 28,
2004, which date may be extended to March 27, 2004 in the event the registration
statement is reviewed by the Securities and Exchange Commission,  then upon such
failure to register the shares, we must pay each of the investors a fee equal to
1% of the aggregate  purchase  price paid by each such investor  pursuant to the
Securities  Purchase  Agreement for the shares of common stock then held by each
such investor, and for each month after such date that the common shares are not
registered,  we must additionally pay each of the investors a fee equal to 1% of
the  aggregate  purchase  price  paid  by each  such  investor  pursuant  to the
Securities  Purchase  Agreement for the shares of common stock then held by each
such investor.  Pursuant to this agreement,  we filed the registration statement
of which this  prospectus is a part with the Securities and Exchange  Commission
to register for resale the shares of common stock  identified in this prospectus
and owned by the selling stockholders.

         Other  than  the  transactions  described  above,  we had  no  material
relationship with the selling  stockholders during the three years preceding the
date of this prospectus.

SELLING STOCKHOLDER TABLE

         The following  table sets forth:  (1) the name of the  stockholder  for
whom we are registering shares under this registration statement; (2) the number
of shares of our common stock  beneficially  owned by such stockholder  prior to
this  offering;  (3) the  number of shares of our common  stock  offered by such
stockholder  pursuant to this prospectus;  and (4) the number of shares, and (if
one percent or more) the percentage of the total of the outstanding  shares,  of
our  common  stock to be  beneficially  owned  by such  stockholder  after  this
offering, assuming that all of the shares of our common stock beneficially owned
by such  stockholder  and offered  pursuant to this prospectus are sold and that
the stockholder acquires no


                                       13



additional  shares of our common stock prior to the completion of this offering.
Such data is based upon information provided by the selling stockholders.



                                                                                                       PERCENTAGE OF
                                                                   COMMON STOCK      COMMON STOCK      COMMON STOCK
                                                COMMON STOCK       BEING OFFERED      OWNED UPON        OWNED UPON
                                               OWNED PRIOR TO    PURSUANT TO THIS    COMPLETION OF     COMPLETION OF
                   NAME                         THE OFFERING        PROSPECTUS       THIS OFFERING     THIS OFFERING
                   ----                         ------------        ----------       -------------     -------------
                                                                                                 
The Thomas B. Fordham Foundation (1)                4,450             4,450                0                 --
Kentucky State District Council Annuity             1,000             1,000                0                 --
Trust Fund (2)
Kentucky State District Council of                  7,850             7,850                0                 --
Carpenters (3)
Novant Health (4)                                   8,250             8,250                0                 --
Raytheon Master Pension Trust (5)                  85,000            85,000                0                 --
Raytheon Company Combined DB/DC Master             19,650            19,650                0                 --
Trust (6)
Raytheon Company Combined DB/DC Master             11,900            11,900                0                 --
Trust (7)
Rush Presbyterian St Lukes Medical Center          18,000            18,000                0                 --
Endowment (8)
Rush Presbyterian St Lukes Medical Center          16,600            16,600                0                 --
Pension (9)
William Blair Small Cap Growth Fund (10)          265,257           265,257                0                 --

  TOTAL                                           437,957           437,957                0                 --
----------

(1)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are held in the  ordinary  course of  business  for the account of The
      Thomas B. Fordham Foundation.

(2)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are  held in the  ordinary  course  of  business  for the  account  of
      Kentucky State District Council Annuity Trust Fund.

(3)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are  held in the  ordinary  course  of  business  for the  account  of
      Kentucky State District Council of Carpenters.

(4)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the


                                       14



      NASD.  These securities were purchased and are held in the ordinary course
      of business for the account of Novant Health.

(5)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are held in the ordinary course of business for the account of Ratheon
      Master Pension Trust.

(6)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are  held in the  ordinary  course  of  business  for the  account  of
      Raytheon Company Combined DB/DC Master Trust.

(7)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are  held in the  ordinary  course  of  business  for the  account  of
      Raytheon Company Combined DB/DC Master Trust.

(8)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are held in the  ordinary  course of business  for the account of Rush
      Presbyterian St Lukes Medical Center Endowment.

(9)   Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are held in the  ordinary  course of business  for the account of Rush
      Presbyterian St Lukes Medical Center Pension.

(10)  Karl W. Brewer and Michael P. Balkin,  Portfolio Managers at William Blair
      &  Company,   LLC,  the  agent  and   attorney-in-fact  for  this  selling
      stockholder, exercise voting and investment authority over the shares held
      by this selling stockholder.  William Blair & Company, LLC is a registered
      broker/dealer and is a member of the NASD. These securities were purchased
      and are held in the ordinary course of business for the account of William
      Blair Small Cap Growth Fund.




                              PLAN OF DISTRIBUTION

         The shares of our common stock offered  pursuant to this prospectus may
be offered and sold from time to time by the selling  stockholders listed in the
preceding section, or its donees,  transferees,  pledgees or other successors in
interest that receive such shares as a gift or other non-sale related  transfer.
The selling  stockholders  will act independently of us in making decisions with
respect to the timing, manner and size of each sale.

         The  selling   stockholders  and  any  of  their  respective  pledgees,
assignees and successors-in-interest  may, from time to time, sell any or all of
their shares of common stock on any stock exchange,  market or trading  facility
on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling  stockholders may use any one or more of
the following methods when selling shares:


                                       15



         o        Ordinary brokerage  transactions and transactions in which the
                  broker-dealer solicits purchasers;

         o        Block trades in which the  broker-dealer  will attempt to sell
                  the shares as agent but may  position  and resell a portion of
                  the block as principal to facilitate the transaction;

         o        Purchases by a  broker-dealer  as principal  and resale by the
                  broker-dealer for its account;

         o        An exchange  distribution  in accordance with the rules of the
                  applicable exchange;

         o        Privately negotiated transactions;

         o        Settlement of short sales;

         o        Broker-dealers may agree with the selling stockholders to sell
                  a specified  number of such shares at a  stipulated  price per
                  share;

         o        A combination of any such methods of sale; and

         o        Any other method permitted pursuant to applicable law.

         The selling  stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, if available, rather than under this prospectus.

         Broker-dealers  engaged by the  selling  stockholders  may  arrange for
other  broker-dealers  to  participate  in  sales.  Broker-dealers  may  receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares,  from the purchaser) in amounts to be
negotiated.  The  selling  stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

         The  selling  stockholders  may  from  time to time  pledge  or grant a
security  interest in some or all of the shares of common stock owned by it and,
if it defaults in the  performance of its secured  obligations,  the pledgees or
secured  parties may offer and sell the shares of common stock from time to time
under this  prospectus,  or under an  amendment  to this  prospectus  under Rule
424(b)(3) or other  applicable  provision of the Securities Act of 1933 amending
the list of selling  stockholders  to include the pledgee,  transferee  or other
successors in interest as a selling stockholder under this prospectus.

         The  selling  stockholders  and any  broker-dealers  or agents that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the  Securities  Act of 1933 in connection  with such sales.  In such
event, any commissions  received by such broker-dealers or agents and any profit
on the resale of the shares  purchased by them may be deemed to be  underwriting
commissions  or  discounts  under  the  Securities  Act  of  1933.  The  selling
stockholders   have  informed  us  that  they  do  not  have  any  agreement  or
understanding,  directly or indirectly, with any person to distribute the common
stock.

         We  are  required  to  pay  all  fees  and  expenses  incident  to  the
registration of the shares. We have agreed to indemnify the selling stockholders
against specified losses, claims, damages and liabilities, including liabilities
under the Securities Act of 1933, all of which are described in the Registration
Rights Agreement described above.


                                       16



                       WHERE YOU CAN FIND MORE INFORMATION

         We have filed a  registration  statement  on Form S-3 with the SEC with
respect to the common stock offered by this prospectus.  This prospectus,  which
constitutes a part of the  registration  statement,  does not contain all of the
information  set  forth  in  the  registration  statement  or the  exhibits  and
schedules that are part of the registration statement. You may read and copy any
document we file at the SEC's public  reference room at 450 Fifth Street,  N.W.,
Washington,  D.C.  20549.  We refer you to the  registration  statement  and the
exhibits and schedules  thereto for further  information  with respect to us and
our common stock.  Please call the SEC at 1-800-SEC-0330 for further information
on the public  reference  room. Our SEC filings are also available to the public
from the SEC's website at www.sec.gov.

         We are subject to the information and periodic  reporting  requirements
of  the  Securities   Exchange  Act  of  1934  and,  in  accordance  with  those
requirements, will continue to file periodic reports, proxy statements and other
information  with the SEC. These periodic  reports,  proxy  statements and other
information  will be available  for  inspection  and copying at the SEC's public
reference rooms and the SEC's website referred to above.

         The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means that we can disclose  important  information to you by
referring to those  documents.  We incorporate by reference the documents listed
below and any additional documents filed by us with the SEC under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this offering of
securities is  terminated.  The  information  we  incorporate by reference is an
important part of this  prospectus,  and any information that we file later with
the SEC will automatically update and supersede this information.

         The documents we incorporate by reference are:

         1.       Our Annual  Report on Form 10-K for the year  ended  September
                  30, 2003 (File No. 000-15245);

         2.       Our  Registration  Statements on Form 8-A as filed on December
                  15,  1986  and  February  10,  2003  (File  Nos.   000-15245),
                  containing a description  of our common stock,  par value $.01
                  per share,  and the separate  preferred share purchase rights,
                  and any  amendment or report filed for the purpose of updating
                  such description; and

         3.       All other  reports  filed by us pursuant  to Section  13(a) or
                  15(d) of the Securities  Exchange Act of 1934 since  September
                  30, 2003,  including  all such reports filed after the date of
                  the initial registration  statement and prior to effectiveness
                  of the registration statement.


         You may  request a copy of these  filings,  at no cost,  by  writing or
calling us at Electronic  Clearing House, Inc., 730 Paseo Camarillo,  Camarillo,
California 93010, telephone number (800) 233-0406, Attention: Alice Cheung.

         You should rely only on the information contained in this prospectus or
any supplement and in the documents incorporated by reference above. We have not
authorized anyone else to provide you with different information. You should not
assume that the  information  in this  prospectus  or any  supplement  or in the
documents  incorporated by reference is accurate on any date other than the date
on the front of those documents.


                                       17



                                  LEGAL MATTERS

         Stubbs Alderton & Markiles,  LLP, Encino,  California,  has rendered to
Electronic Clearing House, Inc. a legal opinion as to the validity of the common
stock covered by this prospectus.


                                     EXPERTS

         The financial  statements  incorporated in this Prospectus by reference
to the Annual  Report on Form 10-K for the year ended  September,  30, 2003 have
been so  incorporated in reliance on the report of  PricewaterhouseCoopers  LLP,
independent  accountants,  given on the  authority  of said firm as  experts  in
auditing and accounting.


                                       18



--------------------------------------------------------------------------------

You should rely only on the information incorporated by reference or provided in
this  prospectus or any  supplement to this  prospectus.  We have not authorized
anyone else to provide you with different information.  The selling stockholders
should  not make an offer of these  shares in any  state  where the offer is not
permitted.  You should not assume that the information in this prospectus or any
supplement to this  prospectus is accurate as of any date other than the date on
the cover page of this prospectus or any supplement.

--------------------------------------------------------------------------------






                              --------------------


                         ELECTRONIC CLEARING HOUSE, INC.


                                   PROSPECTUS





                              --------------------





                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

         The following table itemizes the expenses incurred by the Registrant in
connection  with the offering.  All the amounts  shown are estimates  except the
Securities and Exchange Commission registration fee.

Registration fee - Securities and Exchange Commission ............       $   261
Legal Fees and Expenses ..........................................        20,000
Accounting Fees and Expenses .....................................        15,000
Miscellaneous Expenses ...........................................         2,500
                                                                         -------
     Total .......................................................       $47,761
                                                                         =======


ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

         Section  78.7502 of the Nevada  Revised  Statutes  provides in relevant
part that a  corporation  may  indemnify  any person who was or is a party or is
threatened to be made a party to any  threatened,  pending or completed  action,
suit or proceeding,  whether civil,  criminal,  administrative  or investigative
(other  than an action by or in the right of the  corporation)  by reason of the
fact that such  person is or was a director,  officer,  employee or agent of the
corporation,  or is or was  serving  at the  request  of  the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by such person in  connection  with such action,  suit or proceeding if
such  person is not  otherwise  liable to the  corporation  pursuant to specific
provisons  of the Nevada  Revised  Statutes  or has acted in good faith and in a
manner  such  person  reasonably  believed  to be in the best  interests  of the
corporation,  and,  with respect to any criminal  action or  proceeding,  had no
reasonable cause to believe such person's conduct was unlawful.

         In addition,  Section 78.7502 provides that a corporation may indemnify
any  person  who was or is a party  or is  threatened  to be made a party to any
threatened,  pending  or  completed  action  or suit by or in the  right  of the
corporation  to procure a judgment  in its favor by reason of the fact that such
person is or was a director,  officer, employee or agent of the corporation,  or
is or was serving at the  request of the  corporation  as a  director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or
other  enterprise  against  expenses  (including  attorneys'  fees) actually and
reasonably  incurred by such person in connection with the defense or settlement
of such action or suit if such person is not otherwise liable to the corporation
pursuant to specific  provisons of the Nevada  Revised  Statutes or has acted in
good faith and in a manner  such  person  reasonably  believed to be in the best
interests of the corporation and its stockholders.  No indemnification  shall be
made in respect of any claim, issue or matter as to which such person shall have
been  adjudged  to be  liable  to the  corporation  in the  performance  of that
person's duty to the  corporation and its  stockholders,  unless and only to the
extent  that the  court in which  such  action or suit is or was  pending  shall
determine upon application  that, in view of all the  circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses and
then only to the extent that the court shall determine.


                                      II-1



         Nevada  law  further  provides  that a  corporation  may  purchase  and
maintain insurance or make other financial  arrangements on behalf of any person
who is or was a director,  officer, employee or agent of the corporation,  or is
or was  serving  at the  request  of the  corporation  as a  director,  officer,
employee or agent of another corporation,  partnership,  joint venture, trust or
other  enterprise for any liability  asserted  against such person and liability
and expenses  incurred by such person in such  person's  capacity as a director,
officer,  employee  or agent,  or arising out of such  person's  status as such,
whether or not the  corporation  has the  authority  to  indemnify  such  person
against such liability and expenses.

         The  Registrant has purchased an insurance  policy  intended to provide
coverage  to any  person  who was or is a party  or is  threatened  to be made a
party,  in any  threatened,  pending or completed  action,  suit or  proceeding,
whether civil,  criminal,  administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that such person is
or was a director,  officer, employee or agent of the corporation,  or is or was
serving at the request of the  corporation as a director,  officer,  employee or
agent  of  another  corporation,  partnership,  joint  venture,  trust  or other
enterprise,  against expenses (including attorneys' fees), judgments,  fines and
amounts paid in settlement  actually and  reasonably  incurred by such person in
connection with such action, suit or proceeding.

ITEM 16. EXHIBITS.

EXHIBIT
NUMBER                                  DESCRIPTION
-------        -----------------------------------------------------------------

4.2            Specimen Common Stock Certificate (1)

5.1            Opinion and Consent of Stubbs Alderton & Markiles, LLP (4)

10.54          Form of Securities  Purchase Agreement dated October 23, 2003, by
               and among the Registrant and the  Purchasers  identified  therein
               (2)

10.55          Form of Registration  Rights Agreement dated October 23, 2003, by
               and among the Registrant and the  Purchasers  identified  therein
               (2)

23.1           Consent of PricewaterhouseCoopers LLP

23.2           Consent of Stubbs Alderton & Markiles, LLP (3)(4)

24.1           Power of Attorney (4)

----------
(1)   Filed as an Exhibit to Registrant's  Form S-1,  Amendment No. 3, effective
      November 13, 1990 and incorporated herein by reference.

(2)   Filed as an  Exhibit  to  Registrant's  Current  Report  on Form 8-K dated
      October 30, 2003 and incorporated herein by reference.

(3)   Included in Exhibit 5.1.

(4)   Previously filed.


                                      II-2



ITEM 17. UNDERTAKINGS.

         The undersigned registrant hereby undertakes:

         (1) To file, during any period in which offers or sales are being made,
a  post-effective  amendment  to this  registration  statement  to  include  any
material  information  with respect to the plan of  distribution  not previously
disclosed  in  the  registration  statement  or  any  material  change  to  such
information in the registration statement;

         (2) That, for the purpose of determining liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  BONA FIDE  offering
thereof; and

         (3) To remove from registration by means of a post-effective  amendment
any of the securities being registered which remain unsold at the termination of
the offering.

         The  undersigned  registrant  hereby  undertakes  that, for purposes of
determining  any  liability  under  the  Securities  Act,  each  filing  of  the
registrant's  annual  report  pursuant to Section 13(a) or 15(d) of the Exchange
Act (and,  where  applicable,  each filing of an employee  benefit plan's annual
report  pursuant to Section 15(d) of the Exchange Act) that is  incorporated  by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities  offered therein,  and the offering of such
securities  at that time shall be deemed to be the  initial  BONA FIDE  offering
thereof.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors,  officers and controlling  persons of
the  registrant  pursuant  to  the  foregoing  provisions,   or  otherwise,  the
registrant  has been advised that in the opinion of the  Securities and Exchange
Commission  such  indemnification  is against  public policy as expressed in the
Securities Act and is, therefore,  unenforceable.  In the event that a claim for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses  incurred or paid by a director,  officer or  controlling
person of the  registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of the  appropriate  jurisdiction  the  question  whether such
indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

         The undersigned hereby undertakes that:

         (1) For purposes of determining  any liability under the Securities Act
of 1933, the  information  omitted from the form of prospectus  filed as part of
this  registration  statement in reliance upon Rule 430A and contained in a form
of  prospectus  filed by the  registrant  pursuant to Rule  424(b)(1)  or (4) or
497(h)  under  the  Securities  Act of 1933  shall be  deemed to be part of this
registration statement as of the time it was declared effective.

         (2) For the purpose of determining  any liability  under the Securities
Act of 1933,  each  post-effective  amendment that contains a form of prospectus
shall be deemed to be a new  registration  statement  relating to the securities
offered  therein,  and the  offering  of such  securities  at that time shall be
deemed to be the initial BONA FIDE offering thereof.


                                      II-3



                                   SIGNATURES


         Pursuant  to the  requirements  of the  Securities  Act  of  1933,  the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized, in the City of Camarillo, State of California, on January 16, 2004.


                                       ELECTRONIC CLEARING HOUSE, INC.

                                 By:   /S/ JOEL M. BARRY
                                       ------------------------------
                                       Joel M. Barry
                                       Chairman of the Board and Chief Executive
                                       Officer



         Pursuant  to the  requirements  of the  Securities  Act of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates stated.

       SIGNATURE                         TITLE                        DATE
       ---------                         -----                        ----


/s/ Joel M. Barry              Chairman of the Board           January 16, 2004
-------------------------      and Chief Executive Officer
Joel M. Barry

*                              Director                        January 16, 2004
-------------------------
Aristides W. Georgantas

*                              Director                        January 16, 2004
-------------------------
Hubert L. Lucas

*                              Director                        January 16, 2004
-------------------------
Carl R. Terzian

/s/ Alice L. Cheung            Chief Financial Officer         January 16, 2004
-------------------------      and Treasurer
Alice L. Cheung


* By:   /s/ Joel M. Barry
      -------------------
      Joel M. Barry
      Attorney-in-Fact


                                      S-1



                                  EXHIBIT INDEX

EXHIBIT
NUMBER                                  DESCRIPTION
-------        -----------------------------------------------------------------

4.2            Specimen Common Stock Certificate (1)

5.1            Opinion and Consent of Stubbs Alderton & Markiles, LLP (4)

10.54          Form of Securities  Purchase Agreement dated October 23, 2003, by
               and among the Registrant and the  Purchasers  identified  therein
               (2)

10.55          Form of Registration  Rights Agreement dated October 23, 2003, by
               and among the Registrant and the  Purchasers  identified  therein
               (2)

23.1           Consent of PricewaterhouseCoopers LLP

23.2           Consent of Stubbs Alderton & Markiles, LLP (3)(4)

24.1           Power of Attorney (4)

----------
(1)   Filed as an Exhibit to Registrant's  Form S-1,  Amendment No. 3, effective
      November 13, 1990 and incorporated herein by reference.

(2)   Filed as an  Exhibit  to  Registrant's  Current  Report  on Form 8-K dated
      October 30, 2003 and incorporated herein by reference.

(3)   Included in Exhibit 5.1.

(4)   Previously filed.


                                      EX-1