The two previous blog posts have covered electronic check verification and electronic check conversion, so now it’s time to cover the last service offered for electronic check acceptance, electronic check guarantee.
Traditional check acceptance creates a liability for the business with customers who write bad checks. Electronic check verification is a service that can verify customer funds are available prior to payment acceptance. However, if the customer removes the funds prior to settlement the business will be unable to collect the money owed. The solution to this problem is an electronic check guarantee system.
What is electronic check guarantee?
An electronic check guarantee solution guarantees your customer’s payment regardless if the check is collected upon or not. The solution provider assumes the risk of insufficient funds so that your business does not have to.
How does it work?
- Upon check out the customer’s check is scanned using a check scanner or keyed into the electronic check acceptance terminal.
- The guarantee solution checks the customer in the bad check writer’s database.
- If the customer shows up in the database the check is declined.
- If the customer does not show up in the bad check writer’s database the check is approved.
- Upon settlement, if the customer’s account has insufficient funds, the guarantee solution will deposit the full amount of the check into the business banking account. The guarantee solution then adds the customer to the bad check writers database.
If your business accepts a lot of checks an electronic check guarantee solution can be an invaluable product. This solution frees you up to focus your attention on the business and to forget about collection efforts.
Would you like more information on an electronic check guarantee solution?