What is Electronic Check Conversion?

Electronic Check Conversion - sometimes called "check truncation" - is the ability to scan the checking account information encoded at the bottom of a check, convert that data into an electronic check draft, and then transmit that information to the financial institution or bank that holds the checking account. The paper check is then returned to the customer to be "voided" and the payment is made to the merchant the same way that a normal check would be paid. In a sense, Electronic Check service is the automated version of a paper check.

Actually, most customers find it more convenient than using a paper check because they immediately have a transaction receipt and the paper check as a record of their purchases and they don't have to wait for their monthly statement to document the transaction.

The New Check Standard

Additionally, with "Check 21" (the Check Clearing for the 21st Century Act), a new federal law that allows banks and other financial institutions to exchange electronic images of checks instead of paper checks, customers are becoming even more familiar with "no-paper" checking transactions, and Electronic Check is becoming the standard for accepting checks at retailers across the country.

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