Check Processing -more Convenient Than Ever Before

Electronic check processing has made paying via check more convenient and efficient for both merchants and customers

. The automated clearing house, or ACH, system allows for bank to bank transactions to be handled electronically. Virtually all the elements involved in doing business with checks can be handled with an ACH based system. These elements include direct billing, direct deposit, recovery, verification and e checks.

There are many benefits to using an electronic system for check processing. With direct billing, your business can establish automatic debits from a customer or client's account. These types of debits can be set up for one time payments as well as those that recur. This service streamlines the billing and payment process by eliminating several steps involved in paper billing. Direct deposit lets employees receive their pay electronically. This is a cost effective way to manage payroll that eliminates paper costs, postage and printing fees. It is also beneficial to the employee because payment is immediate and on time even if they are enjoying time off away from their place of employment.

Another benefit to handing check processing electronically deals with recovery. Insufficient funds are a big problem when dealing with a debit system. Manually undertaking the recovery process to attempt to actually receive payment can be time consuming. With an ACH system, this process can be handled electronically. Many businesses have reported a recovery rate of greater than 80% when the issue is dealt with electronically. This method also eliminates some of the embarrassment on the part of the client. Verification is another important feature. In a world where fraud and identity theft are more and more common, businesses and customers want to be assured that funds are being transferred to and from the correct accounts. This system checks information against huge databases to identify risk of fraud.

E checks are another feather in the cap of electronic check processing. The capability now exists for merchants to create an electronic check immediately form a paper one. This happens at the actual point of sale. This feature makes the entire process quicker and more efficient. In the past, it could take 10 days or more for a check to "clear." With this feature, that time is reduced to 48 hours or less. It is also a power tool in fraud detection and prevention. There is an immediate initiation of the identification process that can save time and funds in recovery efforts.

by: Troy Truman

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