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Checks
F.A.Q...
To find an answer to any questions you might have, click on the
one of the frequently asked questions below.
If 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? Aren’t 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? Aren’t credit cards and cash enough?
Since the 1970’s, payment industry leaders have talked about a “checkless society” 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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