CrossCheck Blog

There are three main providers in the check guarantee business. All have been in business for many years, have seasoned and mature products, and a large book of business that covers the entire country. Naturally, merchants want to know how the top check guarantee companies differ from each other. Obviously, I cannot speak for the other two providers, but I can offer general information about the industry. While we all provide similar services, the business model for each company is different (see below for "Company Differences" and "The CrossCheck Approach"). The fundamental differences are how the product is sold, who the target market is, how the pricing is determined, the types of hardware supported, how authorizations are handled, how claims are paid, and how responsive customer service is to the merchant.

We get calls from merchants who want to know the difference between check verification and check guarantee. The typical scenario is that the merchant takes a bad check, tries to collect on it themselves, and discovers how difficult it is to do that. Other times, a check is missing from a bank deposit, or the merchant is just tired of taking an hour off to go to the bank every day. They have heard about check service companies and now they want to know how they can benefit from using one. Article Summary Check Verification Versus Check Guarantee Basic Check Guarantee Electronic Check Processing Some Merchants Prefer Checks How Check Guarantee Helps Protect Merchants How Check Guarantee Helps Consumers Additional Protection for Merchants There are two time-tested ways to deal with this. They are check verification and check guarantee.

The CrossCheck website receives a lot of queries: “Is this a good check?” … “I need to verify a check.” … “I received this check in the mail, is it real?” … and a dozen variations on a weekly basis. The marketing team responds as follows (or something similar) if the message is from a consumer: “CrossCheck provides check guarantee and other payments-processing services to merchants via monthly service agreements. We suggest you discuss the situation with the issuing bank. Thanks and good luck.” Sometimes the messages are disheartening: “Just got burned by a bad check.” If it’s a merchant, we explain that we can’t do anything about that particular check, but we can guarantee future checks to mitigate their losses.

What do Formula One auto racing and CrossCheck have in common? The answer is, “quite a bit.” Some explanation is in order. Formula One (aka “Formula 1” and “F1”) auto racing is one of the most exciting sports in modern Western civilization, with all the ingredients for a fabulous experience embedded into it. Article Summary Why is Formula One a fabulous experience? Who owns Formula One? What are the common denominators between F1 and CrossCheck? Why do auto dealerships prefer CrossCheck?

Check machines are a very common and often overlooked piece of technology used by merchants and other businesses today. Checks continue to be a preferred payment method for a sizable portion of consumers for certain purchases. Consequently, vendors should be equipped with check machines to streamline their check transaction process and mitigate the risk of bad checks.

Returned checks have been a domestic problem ever since checks were introduced in the U.S. by Boston businessmen circa 1681. Solutions vary, including pitches for “free online check verification” or “how to verify funds on a check before it bounces.” The bottom line, however, is that free check verification is as much of a myth as the proverbial free lunch or snake-oil elixirs. The cure, of course, is to contract a check verification and guarantee service provider. Acknowledging this fact, there are four general types of merchants who have or need check processing services: Merchants with check verification or guarantee. Merchants who don’t have check processing services. Merchants who want to accept check payments. Merchants with a returned check problem. Each of their stories is compelling, and each category has valid reasons for functioning with or without check processing services. The variables and outcomes are explored here.

Paper checks and check guarantee services are like everyday things that keep running and running: the iconic rabbit from the battery commercials, the backup fridge in the garage, the commuter car from way back when, and the guy in the movie named after a bunch of trees. Despite Fintechs saying they are "old and in the way," traditional checks keep millions of American businesses running and running. Furthermore, a few financial prognosticators also predicted checks were going to be obsolete decades ago. Nevertheless, paper checks continue to prevail. As a famous author once said, “The rumors of my demise are greatly exaggerated.” Why do checks keep running and running, and what role do check guarantee services play in their success?

Since checks are still a popular form of consumer payment, refusing them all together may be cutting out a slice of the proverbial pie ― a slice of profits that is. Additionally, checks are more cost-effective for merchants with low-profit margins when compared to the high cost of card processing fees. By accepting checks, however, merchants run the risk of having checks returned which equates to money lost. Every bit of revenue counts when running a business, so returned checks are not anyone’s cup of tea. This is where check guarantee companies come into play.