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.

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.

References in periodicals archive ?
These changes were implemented on September 15 by NACHA (The Electronics Payment Association): Before this recent change, Fountain said check conversions were only allowed for consumer checks.
Fountain said that one of me reasons businesses were not included in check conversions was that it was not easy to determine at the point of sale if a person writing the business check was authorized to give consent for conversion: However, the newly implemented changes mark a shift in the default position and allows for most business checks to be converted.
Financial institutions offering ACH Web Client create opportunities to increase non-interest fee income and enjoy a significant cost advantage over competitors that are not capable of originating electronic check conversions.
ACH Web Client incorporates a fully integrated, industry standard desktop scanner for electronic check capture and image storage for accounts receivable/lockbox conversions (ARCs) and returned check conversion (RCK).
Stepanik added, "CheckFree's market leadership in the transaction processing industry and their track record of consistent, high-quality systems, combined with the innovative US Dataworks solutions, makes a compelling case for large corporations to process their check conversions in-house rather than use outside service providers.
This check conversion product suite will position CheckFree to offer a complete processing package from the corporate location through the Federal Reserve Banking system.