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Electronic Check conversion is among the fastest growing types of electronic payment applications. It is the process of converting a paper check payment into an electronic one.

Types of Check Conversion

There are several types of check conversion, including accounts receivable conversion, point-of-purchase conversion, and back-office conversion. Each conversion offers unique benefits and makes writing, processing and accepting paper checks easier for consumers, businesses and financial institutions.

  • Accounts Receivable Conversion (ARC). When a consumer writes a check to pay bills and the biller converts the check to an electronic payment. The original check is destroyed and an image of the check is archived.
  • Point-of-Purchase (POP). When a consumer writes a check at the checkout counter and the retailer or business converts the check to an electronic payment at the point-of-sale. The original check is voided and returned to the consumer in-store.
  • Back-Office Conversion (BOC). A new electronic check application that allows retailers and billers to accept checks at either the point-of-purchase or manned bill payment locations, and then place it in the till for processing at a centralized back office later.
  • Remote Deposit Capture (RDC). An ability for Businesses and Financial Institutions to scan and submit deposit images remotely to support non-branch deposits.

How it Works:

  • A consumer or business writes a paper check, giving it to a store cashier or sending it to a biller through the mail.
  • The information pertinent to the payment is automatically captured, including: routing, account and check numbers, the name of the business receiving the check, and the date and transaction amount.
  • The data captured is presented to the consumer's financial institution and the account is debited.
  • Processing the check electronically significantly reduces the possibility for human error and increases the accuracy and speed of processing.
  • The retailer or biller creates a digital image of the check and destroys the original document. The image is archived for two years for accurate record keeping.
  • Checks can be deposited virtually by scanning the check image at an ATM or via online banking.
  • Mobile banking solutions may utilize check conversion options for electronic bill payment.
  • The consumer's bank statement will include the payment details. It may appear similar to either a check listing or an Electronic Funds Transfer (EFT), which is like an ATM withdrawal or direct payment.

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