Electronic check conversion

What types of electronic check conversion available?

There are two main types of electronic check conversion - electronic check conversion and electronic check conversion with check guarantee. Before jumping into the main difference however, it is helpful to explain some time, electronic check conversion usually spend.

Electronic check conversion explained with credit cards

The best way to explain to electronic check conversion (and even electronic check conversion with check guarantee) is on credit cards to. Years ago had placed instead of claws, apparatus, along with a two-part form of carbon credit cards in an electronic reader, dealer physically in a metal. A heavy rolls created an imprint of the credit card. After the signing of the form, a copy was remained with the memory and the other to the buyer.

But in the last twenty years without shoppers and shops with additional paper, because everything thanks to the electronic reader is electronically stored. An amount is entered with electronic check conversion and check is much like credit cards scanned today. When the transaction is complete control is returned to the customer because everything is stored electronically. As the business needs an additional paper trail with current credit card transactions, no longer.

Electronic check conversion advantages

Electronic check is electronically converting the transaction due to the box readers credit card terminal connected to. Also like credit card electronic check conversion, or electronic check conversion with check box drops guarantee, a check box if there is a problem with the account.

This was reduced. Any kind of control will get a dealer is electronically connected to a database or accounts with risky stories examined. Although the companies do not see in particular, what could be the problem, it is red flag negative marks in the last 90 days and refuses the check box. This could all be from a closed account to bouncing checks.

If testing negative database successfully, it then is converted to an electronic direct debit, which are funds deposited in the merchant account. This happens when the check box writer sufficient resources 'is written in its current account at the time that has the check box'.

Electronic check conversion, not however automatically treats a review case that something with the account in the is true here and now. This is where electronic check conversion with check guarantee into play comes.

Electronic check conversion with check guarantee

Electronic check conversion with check guarantee provides more protection for dealer. The electronic check conversion with check guarantee have need not to worry, because they still get paid. Many companies offer both forms - electronic check conversion and electronic check conversion with check guarantee. You should however usually electronic check conversion with check guarantee because this service more protection for merchants in offers.

As with electronic check conversion, check at the time of the transaction is approved. But more importantly, the memory is funding within 48 hours, even if the control is returned non sufficient funds is guaranteed. The same can be said for the basic electronic check conversion.

Electronic check conversion with check box is the right for you guaranteed?

Each companies can benefit from electronic check conversion with check guarantee. The cost of electronic check guarantee is very similar to the cost of the credit cards. However, the discount rate for this feature typically costs less then the discount rate for credit card acceptance.

For a company to decide whether electronic check conversion with check guarantee for them is correct should they, accept how often it checks, be NSF, or for other reasons, such as closed accounts, etc. are bad. Not only electronic check conversion with check guarantee save companies financial losses due to bad transactions, but also peace of mind, that payment for products or services sold, get offers.

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Never Go To The Bank Again: How Businesses Save Time and Money with Electronic Check Processing

What is Electronic Check Processing?

Electronic check processing means that you can convert a paper check received from a customer into an electronic transfer (sometimes called an e-check) that takes funds from your customer's account and places them into your account. (You may have seen transactions of this type on your checking statement.) This transfer takes place via the Federal Reserve Bank's Automated Clearing House (ACH) system. It's a faster, less-expensive way to get your money.

What is the ACH Network?
Put very simply, the ACH network moves money from one entity to another--electronically. The Automated Clearing House (ACH) Network is a highly reliable and efficient nationwide batch-oriented electronic funds transfer system which provide for the interbank clearing of electronic payments for participating depository financial institutions. The Federal Reserve and Electronic Payments Network act as ACH Operators, central clearing facilities through which financial institutions transmit or receive ACH entries. The process is governed by NACHA, The National Automated Clearing House Association (nacha.org), operating rules and business processes.

ACH Transaction Types:

Direct Deposit of payroll, Social Security and other government benefits, and tax refunds
Direct Payment of consumer bills such as loans, utility bills and insurance premiums
Business-to-business payments
Electronic Checks (E-checks)
E-commerce payments
Federal, state and local tax payments.

If you're getting your paychecks directly deposited into your bank account, you're already using the ACH network. You can leverage this system for your business so that you never need to go to the bank again--you can process checks electronically from your computer.

Processing Electronic Checks

Electronic check processing is the means by which you can take a paper check and submit it for payment electronically instead of taking it to the bank. Your bank may offer you this capability if you purchase a check scanner from them. The scanner takes an image of the check and submits that image to the bank electronically. The bank then processes that check just as if you had handed over the physical check itself.

An easier way to process checks electronically is to use a software program or a web-based payment processing service. When using a web-based system or ASP, you don't need to install any software or buy any hardware. You simply key in check information and submit the transaction.

The process is simple:

1. Notify
You must notify your customers that their paper checks will be processed electronically. You can do this in writing on your invoices, or you can post a sign with this information at your place of business.

2. Collect and Convert

When a paper check is presented as payment, it is converted to a one-time ACH-based electronic payment, with pertinent information regarding the customer's financial institution and account number captured. You then make an image for archival purposes (you should keep this copy for 2 years), stamp the original check "VOID" and discard it.

3. Process

An ACH file is created and presented to your financial institution--this is typically done by the payment processing system you are using; the payments are processed through the ACH network, the customer's account is debited, and your account is credited. It typically takes about two business days for the money to reach your account; this is about the same time it takes when you submit a paper check to the bank. However, you will be notified of insufficient funds in about 48 hours with an electronic transaction--it can take over a week to get that information with a traditional transaction.

4. Confirm.

Once your customer's account is electronically debited, the payment is listed on their bank account statement under "other electronic payments" or a similarly labeled area. The description will include the check number, amount, and the billing company name. Your customers won't be able to get a copy of the check with their statements, but they can request that you provide a copy (which is why you need to keep one in your files).

Electronic Check Processing Enables Your Business To:

Improve cash flow with quicker access to your money
Save your customers time and money
Increase on-time collections
Receive 48-hour notification of NSF
Eliminate manual reconciliation of insufficient funds
Eliminate time-wasting trips to the bank

Why Use Electronic Check Processing?

It costs on average $1.22, in manpower and incidental costs, to process a paper check. Electronically processing that check can cost as little as 55 cents.


Check conversion requires very little effort or time to set up, and once it is established, your company immediately begins saving money.


Your customers will appreciate the convenience too! With electronic check (or e-check) processing they can give you the check information over the phone, or submit it via an online form. They no longer need to pay postage!


Check conversion relies on the same secure network used for Direct Deposit and Direct Payment, the Automated Clearing House (ACH).


The Federal Reserve's Regulation E and the NACHA Operating Rules regulate electronic payments processed through the ACH network. Because of Reg E and NACHA's Operating Rules, consumers have greater protection with check conversion.


Check conversion is the fastest-growing type of electronic payment ever. Over 1 billion consumer bill payments by check were successfully converted to ACH payments in 2004.


Check conversion reduces time and resources needed to process payments, resulting in continued cost savings to your company.


Electronic processing reduces the burden on our nation's transportation systems and the environment. It takes a considerable amount of fuel to ship our country's millions of checks each year between companies, financial institutions, and customers.

(statistics provided by electronicpayments.org)

Tips for selecting an Electronic Check Processing System

Choose a system that does not require you to purchase expensive hardware or software upfront


Look for a flat rate on electronic check transactions--you should never have to pay a percentage of the transaction to the processor.


Pay attention to both monthly fees, transaction fees, and monthly minimums to select a system that makes the most financial sense for your business


Choose a system that securely stores customer information so that you will be able to eliminate duplicate data entry when your customers submit multiple payments.


Choose a system that can easily export customer data so that you can automate your entire a/r system by integrating payment processing with your main business management software.


Look for a system that enables you to both process electronic checks and to do direct-debit transactions. (This means collecting from customer bank accounts without having a paper check--such as check by phone transactions, online bill pay, or recurring monthly charges deducted automatically from customer accounts.) You should be charged the same flat transaction amount for direct-debits that you are charged for electronic check transactions.


Security is important when transferring funds electronically--make certain that the payment processing system you use has powerful security and encryption tools in place such as a 1024-bit Digital Certificate, 128-bit encryption, and a SSL (Secured Socket Layer) compliant with CISP -- Cardholder Information Security Platform.

Lisa Hephner is the PaySimple marketing manager.

PaySimple provides effortless electronic payment processing via a simple web-based interface used to perform auto recurring billing, electronic check processing, direct-debit and credit card processing.

For more information on Electronic Check Processing See: http://www.paysimple.com/electronic_check_processing.html

For more information on ACH see http://www.paysimple.com/about_ach.html

For more information on Auto-Recurring billing see: http://www.paysimple.com/auto_recurring_billing.html

To contact Lisa Hephner email lisa@paysimple.com

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