Paper checks are in decline, but they remain an important part of the US payments landscape. Many businesses want to accept checks with a bit more confidence so we have several options for business owners to consider. Keep in mind that not all businesses need these various services!
If you are a business owner who accepts checks and does not have a challenge with checks being returned to you, you will not need to spend the money on a guarantee program. Likewise, if you’re a merchant who only takes a few checks and running to your financial institution with your deposits is no big deal, the conversion product would not be for you.
It is important to weigh the costs before adding the additional expense of check services. At TMC, we are committed to making sure we only sell you the products and services that are right for your business.
CHECK VERIFICATION: This is a basic verification service that compares the check writer’s name and the account information to a national database (both positive and negative) to see if the check is more than likely to be good or bad- a recommendation is issued and the business owner can elect to accept or decline the check. There is a small per item fee associated with this service and there are no guarantees. A small business owner might use this service if they have a low to moderate rate of returned checks and their average check size is under $200.
CHECK GUARANTEE: This is a service that guarantees funds on checks written to your company. There are usually stipulations that must be met in order to receive the guarantee- in most cases, the check has to be pre printed, it has to be a consumer check (although some guarantee services now allow business checks), the amount of the check would need to be in line with the limits set for the account and some information may be required to be written on the check as well. If all stipulations are met, the check company would go after the bad check writer if a check was returned. This service charges a % and a per item fee- often times comparable to the credit card processing fees being charged. A company would want to consider this service if they have a challenge with checks being returned and if the dollar amounts of the checks written to the company are in excess of $200 (some business owners have a higher threshold for financial pain).
CHECK CONVERSION / CHECK 21: This is a service that allows a small business owner to process a check in such a way that the check is converted into an electronic transaction. The checks do not have to be taken to a financial institution for processing and in many cases, the checks are often returned to the writer/customer. The check conversion product can be purchased with or without the guarantee. A company would want to use this service if they have a high volume of checks or if visiting their financial institution on a consistent basis is difficult.
CHECK BY PHONE: Many businesses have the need to accept checks over the phone. While this is a risky way to accept payments, having a great solution that minimizes the risk is very important! If you have a call center environment and need to be able to accept checks along with other forms of payment, this service could be for you!
CHECK BY WEB: Giving your customers the ability to pay by check at your web site is just one more way to make getting paid even easier! This great service is available for many merchant types and is initiated by the customer so your business never enters in their checking information.