There was a time when people used paper checks as a payment mechanism. You make a purchase, and you just write a check to the seller. The seller would take it to the bank, the bank would process it, and the money would be deposited in the seller’s account. It was a process that took days to complete. The depositor had to wait for a couple of days for the funds to clear. However, nowadays, it is not the case, you can transfer or receive funds via electronic payment systems. Electronic check payment processing is cashing check simplified. You can use an electronic check or an e-check to transfer or receive funds.
A paper check is written at the point of sale. The check is run through a Reader or an Imager by a clerk. The system will capture the required information, like the check number, account number, and the bank/financial institution identification number. The merchant-related information is also captured. The electronic check is guaranteed or verified by the provider, depending on the merchant’s agreement.
A receipt is created or generated for the provider to sign. The paper check is then voided and returned back. The transaction will appear on the bank statement of the customer as a ‘debit’, not as a check. The e-check is uploaded by the merchant for processing. The funds will be deposited into the merchant’s account within a couple of days.
Benefits of electronic check processing include:
- You do not have to take the check to the bank
- Funds will be transferred to your account faster
- The process reduces the chance of the check getting lost or stolen, significantly.
- For merchants doing business in more than one location, the electronic check can be converted at the respective places and the amount/fund can be centralized in one main account.
Check processing services include:
- Check data entry – The check information is entered (like the account number, bank identification number, amount, and so on)
- Check scanning services – The paper check is scanned or imaged using a scanner or a reader
- Check verification services – The check is verified with the check-writer
- Transaction verification – The transaction is verified by the involved parties
Check processing services are ideal for sectors like Healthcare, Government, Legal companies, Financial institutions, and so on. There are a lot of data entry companies that offer the check processing services. Many of the organizations nowadays outsource their check processing services to these companies. The advantage is that you will be spared of the intricacies related to the administrative responsibilities, and these companies will ensure an error-free check processing.