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While the various check conversion applications are processed similarly over the ACH Network, it is important to be able to explain to your business and individual customers the front-end differences between forms of check conversion. Use this guide when speaking to both your individual and business customers.
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 New Rule: BOC
Beginning on March 16, 2007, a new check conversion application, Back Office Conversion (BOC), will become available. BOC will allow your business customers 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.
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Processing Bill Payment Checks
ARC (Accounts Receivable Entry) |
Processing Retail Checks
POP (Point-of-Purchase)
BOC (Back Office Conversion) |
1. NOTIFY
When business customers plan to process bill payments using check conversion, they must notify consumers that the process is going to take place, usually with a notice on billing statements or as an enclosure in the bills they send out.
Keep in mind that individuals may not pay attention to these notices, which is why your individual customers may have questions about the process. Let your customers know that companies of all sizes that process payments are using check conversion to save time and money.
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1. NOTIFY
When business customers plan to convert checks at a point of sale, they are required to provide notification prior to accepting the checks. 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.
Advise your customers to educate their customers. Consumers can always choose to use another method of payment when shopping.
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2. WRITE A CHECK
Individual customers write a paper check and place it in a dropbox or mail it to the billing company, which could be a credit card company, utility company, or a mortgage lender, among others. By providing the signed check after they have been notified that the company may convert the check, they are providing authorization for conversion.
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2. WRITE A CHECK
Individual customers write a check at the point of sale for their purchase. Under POP, they must also sign a form authorizing the conversion. Under BOC, they are providing authorization for check conversion by signing the check after notification has been provided by the business.
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3. CONVERT
When a paper check is received as payment, it is converted to a one-time ACH debit, with payment information captured. Businesses then make an image for archival purposes, destroying the original check.
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3. CONVERT
When a paper check is presented as payment under POP, it is converted at the register to a one-time ACH debit, with payment information captured. The original check is then voided and handed back to the customer.
Under BOC, the check is collected at the register and converted later in a centralized location. In this case, once the payment information is captured, an image is retained for at least two years, and the original check is securely stored until destroyed.
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4. PROCESS
Your business customers present you with an ACH file to process. Extract information for individual accounts at your institution, and process the remaining transactions through the ACH network. Your business customer accounts will be credited appropriately.
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4. PROCESS
Your business customers present you with an ACH file to process. Extract information for individual accounts at your institution, and process the remaining transactions through the ACH network. Your business customer accounts will be credited appropriately.
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5. CONFIRM
The account statements you provide your individual customers will detail the payment. Explain to your individual customers that this may appear similar to a check listing, or show up as an Electronic Funds Transfer (EFT), similar to an ATM withdrawal or Direct Payment. The description will include the check number, amount, and the biller name.
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5. CONFIRM
The account statements you provide your individual customers will detail the payment. Explain to your individual customers that this may appear similar to a check listing, or show up as an Electronic Funds Transfer (EFT), similar to an ATM withdrawal or Direct Payment. The description will include the check number, amount, and the business name.
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There is an environmental impact to using paper checks. In addition to the natural resources used to manufacture and print paper checks, processing the checks relies heavily on our nation's transportation systems, including trucks and airplanes. It takes a considerable amount of fuel to ship our country's millions of checks each year between companies, financial institutions, and your home.
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