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Learn about Payment Processing

How Electronic Check Processing Works


If you are not familiar with how electronic check processing works, this page will give you a basic understanding of the process.


Making the sale

At the point-of-sale your customer decides to make their payment using a check.  By law, you must notify them that their check will be processed electronically.  This notification can be verbal, by writing it on your invoices, or posting it on a sign at your place of business.

Commonly for face-to-face transactions, you will run the check through a check reader or check imager that is attached to your processing equipment.  This reads the routing and bank account information on the bottom of the check and prevents you from having to key it in manually.  Depending on the sales amount, you sometimes have to key in their driver's license number or phone number.  This produces a transaction for the payment.

Upon approval of the sale, the receipt is signed and a copy given to your customer.  The paper check is stamped "ACH Processed" and given back.


The Transaction Process

This takes place once your equipment connects to the payment network.  It is where all the complex work is done.  This usally only takes 3-4 seconds.  It is similiar to the PIN-based debit process with a few other processing specific steps.

A check transaction goes through a conversion process, where the check is converting to an electronic transaction.  Then it undergoes a verification process where it is checked against a large negative databases to make sure your customer is not on a list for writing bad checks.

There is also an optional process called check guarantee, where the program guarantees that you will receive your money for any approved check.  This eliminates any worry about accepting checks or collection on returned checks due to fraud or non-sufficient funds caused from the "float" period between the time the check is written and when it clears.

If the transaction is approved, it travels across the secure payment network directly to your customer's financial institution where their bank account resides.  Their account is debited and an ACH transaction is scheduled to transfer the funds to your bank account.


Get your money

Getting your money is much faster and safer than normal checks.  Your customers still benefit the normal "float" period, but you still get your money faster.  And no paper checks to deposit!

The ACH process transfers the money directly into your bank account, bypassing all the payment networks used when settling credit card payments. It usually takes 24-48 hours to get your money.


Learn more about the benefit of accepting electronic checks.