CrossCheck Blog

Among the many queries received by the CrossCheck team, “How do I recover an NSF check?” is one of the most frequent. But, before going any further a definition is in order. An NSF check (aka “non-sufficient funds check”) is a term used when the holder of a checking account is overdrawn and there is not enough money in the account to pay the check written against it. As a merchant, this can pose a problem when accepting checks. Attempting to deposit a check without sufficient funds will result in the bank returning it unpaid. Also, returned checks can come with the additional consequence of added bank fees. Whatever the cause, NSF checks will cost your business money. NSF checks can happen for many different reasons, but whatever the cause, NSF checks will cost your business money.

Accepting checks is a preferred payment type for many merchants — especially those selling big-ticket items — and is a reliable tool for increasing sales and widening customer reach. Accepting checks is one thing, but deciding how to accept check payments safely is another. That is why many merchants choose payment solutions like CrossCheck’s Electronic Check Processing to securely accept, process and deposit checks into their business accounts without leaving the office.

Imagine a world where businesses and consumers could scan checks, upload the images via the web, and quickly determine if the checks are valid. Better yet, imagine if those same stakeholders could continue the process by depositing the checks, all without visiting a bank or leaving their offices. It could be a foolproof system, but on this date, April 1, (aka “April Fool’s Day”), the reality is that free online check verification doesn't exist ― never has and probably never will.

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.

Having the tools for check payment processing is critical for certain industries, especially those that specialize in B2B payments. Checks have been a commonly used payment method for many years. Even as credit card transactions grow more popular, checks continue to have prominence in retail markets. The 2017 Diary of Consumer Payment Choices report by the Federal Reserve Bank of Atlanta states that consumers tend to use "electronic payments and checks for high-value transactions." Additionally, according to an October 2018 Webinar by PYMNTS.COM, 64 percent of B2B payments are still made by using paper checks.

Check processing machines? Yes, we have them. More importantly, though, what does CrossCheck do with them? Like the old adage about tools only being as good as the craftsmen who use them, CrossCheck leverages check processing machines to help merchants increase sales and mitigate risk while saving time and money. Check processing machines became a necessity after Congress passed the Check Clearing for the 21st Century Act (Check 21) in 2003 and it went into effect the following year. The vulnerabilities of the old system — including the overnight exchange of checks between financial institutions — became apparent in the days following Sep. 11, 2001 when all non-military aircraft were grounded for security reasons. As a result, Check 21 allows banks to process checks electronically, making for a more efficient and sustainable check-clearing system.

Before the ink even dries on new merchant contracts, CrossCheck shifts into high gear to setup the accounts and ensure they are operational. The heavy lifting is carried out by the Account Implementation and Retail Systems Support departments with help from the Sales or Partner Relations departments as needed. The goal, of course, is for merchants to start processing checks as soon as possible in order to increase sales, mitigate risk and simplify transactions. The onboarding process varies as a function of the services chosen by the merchant, the size of the merchant and whether or not it has multiple locations processing checks.

Saving lives with check processing services? The claim is ambitious, for sure, but this article makes a solid case in proving the point. Nevertheless, we look forward to receiving feedback in the “Comments” section after viewers have assessed the content. As the saying goes, “you be the judge.”