Friday, April 24, 2009
A check conversion application turns a paper check into an electronic one. The resulting check is sometimes called and echeck or e-check. This is also known as an ACH transaction. The merchant will use a check reader to scan the check at the point of sale. The scanner is can be hooked into a software program that sends the check to the payment processor or the payment gateway. The gateway will return a response that is echoed back to the user via the application. The eCheck will clear depending on the type of agreement with the processor debits are usually faster than a credit transactions standard four day hold time.
Merchant Benefits of ACH
When converting checks or ACH processing is used in conjunction with check verification the merchant benefits are huge. Along with the lower processing costs of eChecks the entire process has been streamlined allowing for the integration of a accounting programs such as QuickBooks, and MYOB. Mistakes from data entry are reduced, the closing and settlement process is also simplified by using ACH eCheck conversion.
Sunday, April 19, 2009
This should have been our first post, but better late than never. Every once in a while we get the question "What is ACH?".
Automated Clearing House
ACH stands for the Automated Clearing House Network. The ACH network is a nationwide electronic funds transfer system. The network is overseen by the NACHA operational rules. They provide the interbank clearing for electronic payments for participants. The electronic payments network and the Federal Reserve are in the position of ACH Operators or the central clearing houses which financial institutions to receive or transmit Automated Clearing House transactions.
According to Nacha the number of ACH payments originated by financial institutions increased to 8.05 billion in 2002, up 13.6 percent from 2001. These payments were valued at $21.7 trillion. Including payments originated by the Federal government, there were a total of 8.94 billion ACH payments in 2002 worth more than $24.4 trillion.
ACH Types of Payments
- eCommerce, web sites etc
- eChecks payments
- B2B (Business to business) payments
- Tax payments made to local, state or federal government
- Direct deposits, government benefits, Social Security, tax refunds, payroll
- Insurance premiums
- Mortgages, loans
- Utility bills
- Other consumer bills
Basic ACH Terms
An entity, individual, corporation that initiates entries into the ACH network.
Originating Depository Financial Institution (ODFI)
A participating financial institution that originates ACH entries at the request of and by (ODFI) agreement with it's customers.
Receiving Depository Financial Institution
Any financial institution qualified to receive ACH entries that agrees to abide by the NACHA Operating Rules and Guidelines
An individual, corporation or other entity who has authorized an Originator to initiate a credit or debit entry to a transaction account held at an RDFI.
Sunday, April 5, 2009
If one of the checks you accept results in an NSF (Non Sufficient Funds) the check guarantee company will reimburse you depending on if the check was accepting according to the guidelines they provide. These guidelines cover whether the writers drivers license is on the back of the check etc. By not following these guidelines the check guarantee company may refuse to pay. Even if they do pay they have the option to debit your account later if they cannot collect from the bad check writer. The fees check guarantee companies charge are pretty steep for the average merchant.
This method of check protection gives you the option to decline or accept a check during the payment process depending on the information and data provided. Verification can be done at checkout. A real-time query is made to check the status of the account. A number of items can be checked.
- Is the account in good standing
- Has the account been stolen or a victim of fruad
- Is the account a non DDA account
- Are there sufficient funds to cover the check
- Is the account in NSF
- Is the routing number and account number valid
- Is there a stop payment on the account
Another optional item would be to have the check ran through a database of known bad check writers.
Compared to check guarantee, check verification is far less expensive.
Some service providers may not be able to offer the entire list above for check verification and may just offer the negative database. In that situation you may want to look at another service provider to get the full benefit of check verification.
There are few choices when trying to set up international payments for your ecommerce website. PayPal and Stripe are great options for those...
Recently we added our little blog to a directory to increase traffic and came across one worth mentioning here. The directory is comprised o...
Already by far the biggest online retailer, Amazon.com Inc. is bidding to become a bigger supplier of e-commerce technology to other retaile...
How do you get your customers to pay you directly from your Facebook or Twitter accounts? Actually its very simple. Your merchant account p...