Check One, Two
Electronic checks aren't exactly a new technology—they've been around for a few years now—but they have been a little slow to appear among the small to mid-size electronics retailers. All that may be about to change. With the passage of the Check 21 Act in October 2004, the country's banking system is now well on its way toward paperless check processing. And coming up right behind the banks are the merchants and manufacturers of "e-check" hardware, services, say merchants, for recognizing the cost savings and shorter check-out times the technology can afford them.
But first, a primer. The Federal Reserve Board has been the primary impetus behind the shift to e-checks, and it explains that an electronic check is not really a check at all. If your dealership has an e-check system, when a customer elects to pay by check, a process called electronic check conversion (ECC) begins. The cashier takes the check, which in many cases can remain entirely blank, and scans it through a reader manufactured by Visa USA, LML or any of a variety of financial services providers. An image of the check is captured by the machine, and the key information on the check (name, account number, routing number, etc.) is recorded. That information is then used to initiate an electronic fund transfer, and it will show up as such on the customer's next bank statement. Then, the cashier gives the check back to the customer and the transaction is complete. Of course, it only takes a matter of seconds.