Checks F.A.Q...

 

To find an answer to any questions you might have, click on the one of the frequently asked questions below.

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f your questions are not answered in this section, please feel free to Contact Us

General 
1 Can I accept checks over the Internet? 
2 What is check verification? 
3 What is check guarantee? 
4 What is a check image? 
5 Is it better to accept credit cards or checks online
6 Why should I accept checks? Arenít credit cards and cash enough?  

Returned Check Collection (RCK) 
7 What is RCK / Returned Check Collection? 
8 How does RCK work? 
9 What are consolidated returns? 
10 Why have I never heard of electronic re-presentment before? 
11 How do I make my customers aware of our new check acceptance policy? 
12 How will my using RCK affect my customers? 
13 Does RCK try to recover all checks, or just checks returned for insufficient funds (NSF)? 
14 What if I do not have access to the Web? 
15 Can I use my existing collection agency RCK? 
16 How can I reduce the number of bad checks that I receive? 
17 I may have written a returned check to a store last week. Can I pay the check at the store where I wrote it to clear it up? 
18 How do I know what my state allows to be charged if I write a bad check? 

Consumer ECC 
19 What is Electronic Check Conversion (ECC)? 
20 Is there any cost to me, the Checkwriter for ECC? 
21 Will the money be taken out of my account instantly? 
22 How is it that this is more secure for me? 
23 Why do I need to sign a receipt? 
24 What happens to my actual paper check? 
25 How will electronic checks appear on my statement? 
26 Will I always need to show my ID? 
27 Will my information be sold for marketing purposes? 
28 Why are retailers changing the way they accept checks? 

Internet Checks 
29 How Can I Accept Checks Over the Internet? 
30 What is ACH? 
31 How exactly is the money being moved? 
32 What if the check is returned? 
33 Will the money be taken back out of my account if the check is returned? 
34 How long does it take for an electronic check to clear? 
35 Will the funds be immediately debited from my account? 
36 Is this process safe for the consumer? 
37 What if my customer advises their bank that the item was not authorized? 
38 Is this process regulated by any government agency? 
39 What happens if the check processor is unable to convert my check information to an electronic ACH item? 

1 Question:  Can I accept checks over the Internet?

Yes, our processor provides merchants with the ability to accept checks over the Internet.  Customers enter their check account information into one of the payment forms used by online merchants and the check is then processed through the Automated Clearing House (ACH).  For complete information, see the Online Check Processing. 

For complete information, Contact Us.

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2 Question:  What is check verification?

Check verification is a low-cost service that verifies checks customers checks.  Checks are verified against the National Check Network (NCN) database.  NCN is one the largest check databases and contains more than 20 million negative records and 100 million positive records used for check verification.  

In addition NCN connects to a network of databases that contain known check fraud and open/closed account information.  If the account number corresponds to a problem account the merchant is notified through the system response.  The NCN system also uses an advanced risk management evaluation system to generate the recommendation to accept or decline a customer's check. Read about Check Verification

For complete information, Contact Us.

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3 Question: 

What is check guarantee?

Check guarantee is like an insurance policy for checks you accept at your retail location.  Each check you receive is first verified through the NCN check database to reduce the chance of accepting a check from a fraudulent check writer.  Then, any checks returned unpaid are sent directly to the check processor.  The processor then pays the merchant the check amount and cash flow continues without interruption whether or not the check is collected.

Standard Check Guarantee Service, is a simple low cost way to accept checks worry-free for less than the cost of credit card processing.

For complete information, Contact Us.

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4 Question: 

What is a check image?

Point-Of-Sale Electronic Check Conversion converts paper checks into electronic transactions and produces a Digital Image of the check.   While the check transaction data is processed, a parallel process at the point-of-sale captures the image of the check and stores it in the Check MICR Reader/Imager.  The check images are transmitted latter to the check processor's database where merchants can retrieve them, if needed, by logging in with a PIN number and User ID.  

For complete information, Contact Us.

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5 Question:  Is it better to accept credit cards or checks online? 

Accepting both credit cards and checks Online has advantages.

Credit cards continue in use because they have the obvious advantages of allowing merchants to put a purchase on credit so the consumer can have the product or service they want now and pay latter.  However, only 18% of American consumers have a credit card that is able to make a purchase and not over the card credit limit.  

Since millions of U.S. households (About 82%) do not have a usable credit card account, selling to this group means providing checks as an alternative.  Checks continue to be the number one form of payment among both consumers and businesses in the USA off-line world.  About 51% of consumers and 84% of businesses pay by check.

Compared to the 18% of consumers with usable credit cards it is important to note that 94% have checking accounts with available cash balances and checks are becoming increasingly popular on the Internet.  In 2001, $11.5 billion totaling 54 million transactions was processed, and the number continues growing very fast.

Accepting Online Checks is a huge market expansion opportunity for aggressive Online merchants plus check processing fees and loss risk are much less than credit card fees and chargebacks.  

For complete information, Contact Us.

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6 Question:  Why should I accept checks? Arenít credit cards and cash enough?

Since the 1970ís, payment industry leaders have talked about a ďcheckless societyĒ where payments are all made electronically. Nevertheless, this is far from true, even today.  The Federal Reserve Bank reported that checks continue to be the number one form of payment with more than 39 billion checks written each year.  

About 48% of consumers and 84% of businesses in the USA pay by check.  It is also important to note only 18% of consumers in the USA have a usable credit card that is not over the credit limit compared to 94% of consumers have checking accounts with cash balances.

Obviously, people want to continue using checks for various reasons, including the cash management discipline they provide, avoiding the debt-increasing factor of using credit cards, and, if nothing else, habit.

As a merchant competing for more customers, providing customers what they want is a number one priority.  Providing customers choice of payment methods including accepting checks is a important decision for merchants wanting to expand market share. 

Accepting and processing paper checks using old traditional handling methods has some disadvantages with paper handling workload and returned check collections being among them. 

However, major new improvements in banking laws and advanced technology have turned check acceptance into a whole new ball game in favor of merchants.  A combination of Electronic Check Services allow merchants to accept checks, eliminate paper check handling, reduce cost, improve customer convenience and reduce risk significantly.  Merchants are now accepting checks with lower cost and less risk of loss than credit cards.

For more information please Contact Us  

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7 Question:  What is RCK / Returned Check Collection ?

Returned Check Collection is a fast and effective means of collecting on returned checks.  The NACHA rules for the ACH Networks allow a returned paper check to be converted into an electronic item, which can then be presented electronically up to two times. This process is called Electronic Check Re-presentment.

For complete information about RCK, Contact Us.

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8 Question:  How does RCK work ?

The merchant gives their bank instructions for all returned checks to be forwarded to the RCK Processor.  The RCK Processor converts the paper items into electronic items and submits them for clearing.  These submissions can be timed to occur just after payday, or they can wait until the availability of funds has been manually confirmed.  

This allows for a much higher rate of successful collections.  The merchant pays nothing for these services.  This service is paid for by the collection fees assessed to check writers when a collection has been completed.  Merchants are paid electronically twice monthly on the collected items.  An online reporting tool allows merchants to view the status of all checks they have in the RCK process.  

See Check Re-Presentment

For information, Contact Us.

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9 Question:  What are consolidated returns ?

Consolidated Returns processing consolidates a company's returned checks into one bank, even if the company has many depository banks.  

This allows a company to control the collection process more effectively by speeding the collection through Electronic Re-presentment and eliminate costly bank return check fees usually associated with NSF items by eliminating the re-deposit step to the depository bank. 

With Consolidated Returns, merchants know more quickly when an item has been returned. This is a critical factor in improving cash flow on NSF items.  See Consolidated Returns

For more information Contact Us.  

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10 Question: 

Why have I never heard of electronic re-presentment before ?

Electronic re-presentment, or the electronic re-deposit of returned checks, has been in use throughout the industry for several years. The National Automated Clearing House Association (NACHA), the governing organization of the ACH industry, approved new regulations regarding electronic re-presentment that became effective in September 1998.  This change protects both merchants and consumers by creating a new classification of transactions specifically for electronic check re-presentments.  

See Check Re-Presentment

For questions, Contact Us.

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11 Question:  How do I make my customers aware of our new check acceptance policy ?

Our RCK Processor provides check return policy signs for all of your stores and locations. These signs ensure that the customer understands the merchant's check acceptance policy at the point of sale.  The processor also provides tear-off receipts for customers that explain the check recovery procedure and give a toll-free number for questions.

For complete information, Contact Us.

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12 Question:  How will using RCK affect my customers ?

RCK is the "customer-friendly" solution to returned checks.  Traditional collection methods have proven to alienate and embarrass customers by having them make good on a bad check in person or through a collection agency.  RCK will simply have a customer's check electronically presented to their account once, or twice if the 1st re-presentment is returned.  This entire process occurs automatically, so there is no effort required on the part of the customer.  A customer service phone number is also available for any customer questions or disputes.

For complete information Contact Us.

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13 Question:  Does RCK try to recover all checks, or just checks returned for insufficient funds (NSF) ?

RCK attempts the recovery of all returned checks.  NSF checks are electronically re-presented.  Checks returned on closed accounts are sent directly to a traditional collection agency partner of the RCK Processor.  "Stop Payments" and "Refer to Maker" are forwarded to the merchant for additional information, and then sent to a traditional collection agency to resolve the dispute.  Checks returned for other reasons are manually reviewed to decide which recovery method is applicable.

For complete information, Contact Us.

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14 Question:  What if I do not have access to the Web ?

The RCK Processor can usually fax or mail monthly account statements directly to merchants that do not have web access.  Merchants may also receive images of all or specific returned checks, with weekly statements, or daily account statements, sometimes for a fee.

For more information, Contact Us.


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15 Question:  Can I use my existing collection agency RCK ?

RCK Processors usually prefer to use their own affiliate or internal collection agency, but you may also choose to use your own collection agency instead, or have them deal with your internal collections department.  To use your own collection agency, simply make arrangements with your RCK Processor to have failed RCK items sent to the agency of your choice.

For complete information, Contact Us.

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16 Question:  How can I reduce the number of bad checks that I receive ?

Besides the standard precautions that merchants should observe in their own check acceptance policy, the use of a Electronic Check Verification or Electronic Check Conversion service can screen out most or all of the bad checks presented at your business.  

These services will check your customer's check and/or Identification information against the NCN database and network information sources of known bad Checkwriters.  If the customer has written bad checks in the past without clearing them up, the check verification service will issue a decline when a check is presented.  For the very best protection, merchants should consider Check Guarantee services.

For complete information, Contact Us.

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17 Question:  I may have written a returned check to a store last week. Can I pay the check at the store where I wrote it to clear it up ?

RCK Processors automatically re-processes returned checks from merchants contracting with them.  Merchants do not collect payments directly because their Processor may have already recovered the funds from your bank account and does not want to charge you twice.

For complete information, Contact Us.

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18 Question:  How do I know what my state allows to be charged if I write a bad check ?

The store that you shop at will display a decal stating their returned check policy.  This decal will also tell you how much you will be charged if your check is returned.

For complete information, Contact Us.

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19 Question:  What is Electronic Check Conversion (ECC) ?

Electronic check conversion, or ECC, is the process of converting a paper check into an electronic funds transfer.  It is a fast, secure way for retailers to accept your check.  For more information, see Electronic Check Conversion. 

For complete information, Contact Us.

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20 Question:  Is there any cost to me, the Checkwriter for ECC?

Of course not, the merchant pays for this service.  There should not be a charge to you, the Checkwriter, from the retailer or from your own bank.

For complete information, Contact Us.

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21 Question:  Will the money be taken out of my account instantly ?

No, the funds are not immediately withdrawn from your account.  The funds are usually withdrawn in 24 - 48 hours.

For more information please Contact Us  

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22 Question:  How is it that this is more secure for me?

By converting your check to an electronic transaction, the potential for unauthorized usage of your account information is greatly reduced, since fewer people see or have access to your check during processing.

For complete information about Online Checks, Contact Us.

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23 Question:  Why do I need to sign a receipt for ECC?

Each paper check is voided and returned to you by the cashier after the information is converted into an electronic transaction.  The signed receipt is for your account protection and provides authentication that you authorized the transaction.  Once the paper check and receipt copy are returned to you, no one else has access to your personal information and you have proof of your transaction.

For information, Contact Us.

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24 Question:  What happens to my actual paper check?

Since the paper check has been converted to an electronic transaction, it is voided for security purposes and returned to you along with a transaction receipt.  See Electronic Check Conversion. 

For more information Contact Us.  

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25 Question:  How will electronic checks appear on my statement?

One of the benefits of electronic check conversion is a more detailed line item description of the transaction appears on the bank statement rather than just appearing as a check number and dollar amount.

For questions, Contact Us.

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26 Question:  Will I always need to show my ID?

For your own identity protection you may still be required to present appropriate identification.

For complete information, Contact Us.

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27 Question:   Will my information be sold for marketing purposes?

No.  Your account information is regarded as highly confidential and is not used or sold for any marketing purposes.

For complete information Contact Us.

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28 Question:  Why are retailers changing the way they accept checks?

In order to protect your identity and personal information, more and more retailers are offering this new technology to improve fraud protection, speed up check out times and lower their operating costs so they can serve you, their customer better.

For complete information, Contact Us.

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29 Question:  How Can I Accept Checks Over the Internet?

By simply capturing all of the information on your customers check and sending it to an Internet Check Processor, you can get paid electronically for the sale without having to ask for a credit card from your customer.  Checking accounts already have electronic items submitted to them, such as insurance payments and other recurring billing payments.  New rules on the use of the banking systems ACH Network allow a paper check to be converted into an electronic item and processed in the same way as other electronic items.

See Online Checks or Checks By Phone.

For more information, Contact Us.


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30 Question:  What is ACH ?

The ACH Network is a financial settlement intermediary network used by banks to transfer funds to and from each other.  The ACH Network has been used by banks for over 25 years and is a safe and secure payment system, processing billions of commercial transactions each year.  Recently, the ACH Network has introduced new rules that provide for more types of electronic uses of traditional checking accounts and 'checks'.

For complete information, Contact Us.

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31 Question:  How exactly is the money being moved?

When the Check Processor submits the customer's check electronically for clearing, they also submit a Credit transaction assigned to the merchant bank account to pay for the sale.  Both of these transfers are accomplished over the ACH Network.

For complete information, Contact Us.

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32 Question:  What if the check is returned?

The Check Processor will automatically re-present the returned check if the return is due to insufficient or uncollected funds.  The processor will also time the re-presentment to hit the Checkwriter's account on the day after payday.  Depending on the size of the item, the processor may also call to verify the availability of funds prior to resubmission.

For complete information, Contact Us.

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33 Question:  Will the money be taken back out of my account if the check is returned ?

The money may be taken back out of your account immediately, or you may be allowed to borrow, or float, the funds while the processor tries to resubmit the item to collect the funds. 

For complete information, Contact Us.

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34 Question:  How long does it take for an electronic check to clear ?

Electronic checks usually clear within 24 - 72 hours.  There is no official notification that an item has cleared with the ACH System; rather, if a check has not returned within the 5 business days it can be considered to mean that the check has cleared.

For complete information, Contact Us.

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35 Question:  Will the funds be immediately debited from my account ?

No, check writers will continue to benefit from some of the float of a paper check, since the electronic check is processed through the ACH system in 24 - 48 hours. 

For complete information, Contact Us.

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36 Question:  Is this process safe for the consumer ?

Companies that process payments electronically (checks, credit cards, ATMs) must follow government guidelines. In case of an error or dispute, consumers have 60 days from the posting date to notify the bank, the same time frame they have today with paper checks. Check writers retain the same rights they currently enjoy in disputing fraudulent items posted to their account.

For complete information about Online Checks, Contact Us.

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37 Question:  What if my customer advises their bank that the item was not authorized ?

Consumers that claim that an item was not authorized must file an affidavit with their bank stating this explicitly.  Once this has occurred, and the item is returned to the check processor, the merchant will be debited the amount of the item.  No further ACH submission of this item is allowed.  

Any claims by the merchant may be pursued in court or by other means if the merchant has reason to believe a false affidavit was filed by the Checkwriter.

For information, Contact Us.

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38 Question:  Is this process regulated by any government agency ?

The electronic check conversion process is governed under Federal law Regulation E and under commercial law UCC 4, which govern all electronic processing and check transactions.

For more information Contact Us.

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39 Question:  What happens if the check processor is unable to convert my check information to an electronic ACH item ?

This may occur in a very few cases and for various reasons.  When the processor is unable to make this conversion, the processor will print a paper check draft with the account information and deposit it just like a regular check.  The merchant will be paid electronically once the paper item has cleared.

For questions, Contact Us.

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