CrossCheck Blog

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.