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While the various check conversion applications are processed similarly over the ACH Network, it is important to understand the differences between forms of check conversion, and in what environments each is used. Use this guide when speaking to your customers and financial institution representatives.
Back Office Conversion (BOC) allows businesses to collect a check written at a point of sale (checkout counter, manned billing location, or service call location) and convert it to an electronic payment in a centralized location.
Review the summary of how it works below, or download the BOC Fact Sheet for more details.
Checks by Mail or Dropbox:
ARC (Accounts Receivable Entry) |
Checks at the Point of Sale:
POP (Point-of-Purchase)
BOC (Back Office Conversion) |
1. Notify
When sending bills for payments that you plan to process using check conversion, you must notify your customers that the process is going to take place, usually with notice on their billing statements or as an enclosure in the bill.
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1. Notify
When accepting checks for payment at a point of sale, you must notify your customers prior to accepting the check that you are going to convert that check into an electronic payment for ACH processing. Under BOC, a notice must be posted in a prominent and conspicuous location and the customer must also be provided a copy of the notice to take away.
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2. Collect and Convert
When a paper check is presented as payment, it is converted to a one-time ACH debit, with payment information captured. You then make an image for archival purposes, destroying the original check.
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2. Collect and Convert
Once notified, customers authorize the conversion by signing an authorization form (POP) or the paper check that is to be converted (BOC). Customers can always opt-out by using another form of payment, if they do not want their checks converted. The check is converted into a one-time ACH debit with payment information captured.
Under POP, the conversion takes place at the register, an image is retained for archival purposes, and the original 'voided' check is then returned to the customer for his or her records. Under BOC, the check is collected at the register and converted later in a centralized location. In this case, an image is retained for at least two years, and the original check must be securely stored until destroyed. |
3. Process
An ACH file is created and presented to your financial institution; the payments are processed through the ACH Network, the customer's account is debited, and your account is credited.
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3. Process
An ACH file is created and presented to your financial institution; the payments are processed through the ACH Network, the customer's account is debited, and your account is credited.
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4. Confirm
Once your customers' accounts are electronically debited, the payment is listed on their bank account statements under "other electronic payments" or a similarly labeled area. The description will include the check number, amount, date and the billing company name.
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4. Confirm
Once your customers' accounts are electronically debited, the payment is listed on their bank account statements under "other electronic payments" or a similarly labeled area. The description will include the check number, amount, date and the business name.
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The typical "point of sale" check will travel 48 miles before it is returned to the check writer. The annual cost to the environment is: 80,099 tons of paper produced, 162 million gallons of fuel consumed, and 788,757 tons of greenhouse gases added to the atmosphere.
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