Paper check, next to cash, is the second most preferred method of payment. However, the problems concomitant with paper checks have not been encouraging to some merchants. The inconveniences of delayed payment and paperwork as well as fraudulent incidences have deterred its widespread acceptance.
Fortunately, financial institutions have developed systems to alleviate those concerns through a number of new product and service enhancements carried out via electronic transmissions. The merging of paper checks with electronic payment processing allows merchants to be more receptive to this convergence of technology.
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Electronic Check Conversion (ECC)
Electronic Check Conversion is the process of transforming a paper check into an electronic transaction known as e-check, through the Automated Clearing House (ACH) network. Processing is done securely in real time. Funds are moved from the consumer's account to the merchant's account automatically within a few days. A merchant must open an account with an electronic check-processing provider like Card Choice International to avail of this option. In addition, a Magnetic-Ink Character Recognition (MICR) check reader or an existing terminal compatible with check conversion is needed.
Electronic Check Conversion with Guarantee
Card Choice International offers all forms of check processing including electronic check guarantee. In electronic check guarantee, the check is swiped through the the Point-Of-Sale (POS) terminal reader. The data is transferred thereafter to the network for approval. If the transaction is approved, a printout of the receipt needs to be filled up by the consumer with his/her signature, printed name, and phone number. The check must be stamped with "ACH Processed" and returned to the consumer. Funds are transferred to the merchant within a few days while the consumer enjoys at least a two (2) day float. In the event of a returned check, the merchant is not charged back as long as proper procedures have been observed.
Electronic Check Conversion with Verification
Electronic Check Conversion with Verification works around the same principles as ECC and ECC w/Guarantee, except consumers are checked against a national negative database and the merchants do not get funded for returned checks or checks that have not cleared through the ACH network. Returned checks are automatically resubmitted via electronic processing for two (2) more attempts. Non-Sufficient Funds (NSF) and Deposit Fees are eliminated, providing merchants with some savings, since transactions occur electronically.
Traditional Paper Check Guarantee
The Traditional Paper Check Guarantee is a low cost program that requires the merchant to deposit the paper checks into the bank. In case of a returned check, the bank sends it to the check guarantee provider. The check guarantee provider in turn, pays the merchant the full amount within 30 days. In this type of transaction, no check reader is required in addition to the terminal. The terminal is the only equipment required in a request for approval. Every check needs to be stamped prior to deposit.
Electronic Represented Check or Electronic Check Recovery (RCK)
Electronic Represented Check or Electronic Check Recovery, simply known as RCK, is a program designed to recover funds from bounced checks (NSF), using a third party provider to handle the collection. Through Card Choice International these services are available to merchants in an effort to help them avoid returned check or re-deposit fees as well as the inconvenience of handling collections. The entire amount of the check is remitted back to the merchant by the 20th day of the month following collection, exclusive of weekends and holidays. There is no recovery service cost charged to the merchant. The RCK processing fee is posted against the check writer's account along with the check amount.
ACH Processing
1. Recurring Debit Program
Recurring Debit Program is an ACH Non-Guarantee service ideal for merchants with a repetitive need for invoicing such as Internet Service Providers and Health Clubs. The amount is automatically debited against a customer's checking account and remains consistent each billing period. A Signed Written Authorization Form is required from the customer prior to program initialization. In sending check transaction data, the amount and interval period can either be e-mailed or directly done through the payment processing provider's web site. There is no software to buy or terminal to maintain. There is no setup fee or discount rate to pay. Neither customers need to write any physical checks nor merchants be encumbered with banking fees and paper check handling costs.
2. MO/TO "Check Not Present" Program
This is an ACH Non-Guarantee program with no physical check written. However, a signed written authorization from the customer or a recorded verbal authorization over the phone, must be secured for every transaction. Each check transaction can be recorded directly into the payment processing provider's website or sent by e-mail. Online reporting allows merchant to know NSF transactions within three (3) days. NSF checks are re-submitted two (2) additional times. Merchants receive funds within a week on all cleared transactions. There is no setup fee or discount rate to pay as well as terminal or software to buy.
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