Electronic check conversion

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Electronic Check Conversion

A form of payment in which the payer writes the payee a check, but in which the actual funds are debited/credited electronically. The U.S. Treasury has used electronic check conversion to make large payments online.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Electronic check conversion.

Electronic check conversion is a payment process in which you give a payee a check, but the actual payment is processed as an electronic funds transfer.

The payment is automatically debited from your account using the account, routing information, and bank ID information on your check, which is either voided and returned to you or destroyed.

A business must notify you before it uses electronic check conversion to process your payment. Keep in mind that an electronic funds transfer will be completed much more quickly than a check, so it's important to have the funds available in your account before you authorize an electronic check conversion.

As with any other type of electronic funds transfer, you have the right to ask your bank to investigate any errors or misuses.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
As part of Wachovia's Corporate and Investment Bank, Wachovia's Treasury Services Division offers a comprehensive suite of integrated payables and receivables solutions, including electronic check conversion, accounts receivable conversion, a full range of ACH services, image technology, a national wholesale and retail lockbox network and international treasury solutions.
Consumer checks converted to electronic: Accounts Receivable Conversion (ARC), which enables consumers' check bill payments to be converted, processed and settled as electronic debit transactions, is the fastest growing application in the Automated Clearing House (ACH) network's history.
In check conversion, checks are converted into ACH debits either at the point of sale or through an accounts receivable conversion (lockbox) service.
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