Frequently Asked Questions
How is Remote
Deposit Capture able to process a paper check as an image?
Since the U.S.
Congress passed a law often called Check 21, banks and other members of the
financial system are able to process electronic check images in lieu of the
actual paper check. This allows the
check clearing system to operate more efficiently and economically by eliminating
the need to transport and retain paper checks.
How does the use of Remote Deposit Capture, sometimes
referred to as Check 21 processing, impact the timing of a paper check clearing
employed by the remote deposit capture process can process and clear checks
faster than traditional methods of clearing paper checks. Checks processed with Remote Deposit Capture,
Check 21, electronic check conversion, or electronic check deposit are almost
always processed by banks ahead of any paper check transaction.
How does Remote
Deposit Capture handle returned checks?
A returned check
that was processed via remote deposit capture, or check 21 systems, is reversed
back out of the recipient’s bank account in much the same manner as a returned
paper check. The timing is dependent
upon the check writer’s bank sending the item back to the recipient’s bank as
either an image or paper draft.
What does check
guarantee do for a merchant?
Check guarantee systems
authorize or decline a check transaction by employing a variety of database
searches and other risk management systems.
The end result is information to the merchant on whether or not the
check would be authorized by the guarantee service provider. If a guaranteed check meets all warranty
requirements and is subsequently returned unpaid to the recipient, it is
eligible for reimbursement.
Does check guarantee verify funds in the check writer’s
No. But it can verify if there are currently
outstanding returned checks associated with that check writer or their bank
account. As well as check for
open/closed account status and valid/invalid routing and account numbers.
How is check guarantee different from check verification?
Check verification may
use the same or similar processes to issue an approval or decline response to a
merchant on any given check transaction.
While check guarantee also transfers the risk of properly authorized
transactions from the merchant to the check guarantee provider, check verification
leaves the risk of an unpaid check with the merchant.
Checks By Phone
What is a checks by phone transaction?
A checks by phone
transaction is an ACH (automated clearing house) payment that is authorized by
a consumer via a telephone transaction with a merchant. The consumer provides
their checking account information and authorizes the merchant to debit their
account for a single transaction.
How can a merchant accept checks by phone?
Checks by phone services
can be provided to merchants meeting underwriting and NACHA processing
requirements who have access to a PC with internet capability.
How does a checks by phone transaction differ from online
check payment services?
Checks by phone
transactions are manually keyed by the merchant based upon information provided
by the consumer during a phone conversation.
Online check payment services originate from information keyed by the
consumer from their PC.
or recurring ACH payments, are prescheduled ACH transactions authorized by a
consumer to a merchant or organization for payment of goods or services.
How are recurring
A consumer agrees in
writing for a merchant or organization to debit his or her account at preset
intervals for predetermined amounts. The
receiving organization schedules the ACH payments via an online terminal or
How can free
check collections work for a business?
Any business that
receives NSF checks which are under $2,500 and under 6 months old can submit
those checks to a Free Check Collections provider. Any eligible returned checks can be submitted
for electronic representment using the ACH system.
Is Free Check
Collections really free?
There are typically
no fees to the merchant using free check collections. The consumer who wrote the dishonored check
pays the state allowable returned check fee.