An Introduction To Electronic Check Payment Processing
In the year 2003, the 108th Congress of the United States passed the Check Clearing for the 21st Century Act, popularly known as the Check 21 Act. This Act came to effect in 2004 and made it possible for a person who received a paper check from anyone to convert it into a digital form. The Check 21 Act provided the big boost for electronic check payment processing. Today, electronic check payment processing systems are used all over the United States. The electronic check payment-processing systems generally rely on the automated clearinghouse system of the federal government of the United States. The electronic check payment-processing systems rely on an e-Check. The e-Check used by these electronic check payment processing systems is similar to the normal checks as both carry the same information and both are regulated by the same laws. E-checks can totally replace all paper checks in remote transactions.
The electronic check payment-processing systems allow a user to 'write' the e-check just as he would have written the paper check. It is also given to the receiver, albeit electronically, like over the phone or the Internet. The receiver then submits the e-check where the electronic check payment-processing systems analyze it for authenticity, just like they would have done with a normal paper check. Finally, if the electronic check payment-processing systems accept the check, the bank clears the e-check and releases the funds to receiver. Electronic check payment processing systems make it possible that any person can use paper checks in an electronic form. This makes it possible for a business to accept and make payments via paper checks in electronic form. The electronic check payment processing system now allows a business to accept checks over phone, Internet and allows them to create an automatic bill clearing systems, where the electronic check payment processing system will allow a business to automatically debit the bill amount from the customer's account with his permission. This means that the problem of bouncing checks and payment defaults gets virtually eliminated. Electronic check payment processing can therefore help a bank very much in improving cash flow. Many companies like PaySimple and FSTC GROUP provide electronic check payment-processing systems. The electronic check payment-processing systems are very safe, much safer as compared to normal paper check. They use advanced authentication based on public key cryptography and duplicate detection technologies. Just like the payer would have signed the paper check, an e-check used by electronic check payment processing systems carries the digital signatures, which are virtually impossible to forge. |