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CHECK CONVERSION

PC WINDOWS/NT VERSION

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 WHAT IS CHECK TRUNCATION (CONVERSION)?

Check Truncation or Conversion is the term used to describe the process of converting, at the point of sale, a personal paper check into an Electronic Funds Transfer (EFT) through the Automated Clearing House (ACH).

THE ACH:

The ACH is a Federally regulated electronic payment network used by over 95% of the country’s financial institutions including thousands of savings banks and credit unions. The Federal Reserve is also a member of the ACH. All funds flow through the Federal Reserve during this process.

 EFT Network Innovation: TRUNCATION ON A PC

We have developed an exclusive new process: truncation (check conversion) using a PC with Windows or NT operating system.

The only other equipment needed is a modem to transmit the data files and a check reader which connects to the PC. The check reader reads the MICR data on the check being presented by the consumer and sends it into a file for transmission to our processing center.

Our system converts your customer’s checks into an Electronic Funds Transfer and debits their account in 24 hours and credits your account in 24-48 hours. No more deposit slips and no more banks runs to make.

Centralize your deposits – you can deposit your money from all over the country into one centralized bank account or you can use as many bank accounts as you want.

Security is increased – we control the bank deposits so that you can be sure the money is going into the correct designated account. Each office prints out a daily deposit slip form the software and the next day you can retrieve the federal reserve deposit confirmation through the software. Your daily deposit slip will carry the same deposit number that the funds are deposited under in your bank account. Easy to account for.

HOW THE ELECTRONIC CHECK PROCESS WORKS:

1. Customer presents a paper check to your bill payment centers.

2. The payment center places the check into a check reader.

3. The check reader is connected to a Windows or NT operating PC which has the EFT Network POS CheckREP software installed.

4. The check MICR data will pop up in the appropriate boxes in the software giving the bank account, routing number, and check number of the check.

5. The payment center fills in the remaining information(customer name, address, amount of check, etc.).

6. Once completed the payment center saves the data and a receipt is printed out.

7. Customer signs receipt authorizing an electronic funds transfer for the amount of money specified in the payment.

8. You can also have the customer sign for an authorization for the collection of a penalty fee allowed by state law in the case that a check is returned for any reason.

9. Once the signature is obtained the customer is given back the check and a copy of the receipt. The payment center must retain their receipt copy for two years.

10. One or more times per day (before 3PM EST to make our daily processing cutoff) the check file that has accumulated for the day is transmitted to our data processing center. This is accomplished by simply pushing a button.

11. When we receive the data we convert it into a NACHA file and send it through the Automated Clearing House (ACH) – the electronic banking system.

12. In 24-48 hours the funds are transferred electronically into Client’s account.

13. When you hook up to our host computer, our system will recognize your software and acknowledge the successful receipt of the data. At the same time it will transfer back to your software any results files that are waiting for you from previous transmissions.

 REPORTS:

Reports are an extremely important part of this process – you must be able to easily track the deposits being made and the returned check incidents.

1. Batch Deposit Slip – When the payment center transfers data they will print out a daily deposit file showing all checks being transmitted and the amounts. This file will be given an alphanumeric name.

2. Daily Deposit – Each day when you connect to our host system you will receive a report on the previous days activity. This is a confirmation receipt of the files sent in step #1 above. This report will also carry the alphanumeric name assigned to the Daily Deposit Slip in #1 above. The funds are deposited into your bank account using this same alphanumeric name.

3. Results Files – On the fifth business day after the transmission date you will receive the results files on every transaction sent in 5 days before. You will have the information on every check collected and every check returned with the reason for each return. You can automatically click on the eligible returned checks (those that are NSF or Uncollected funds), send them back into the check buffer and retransmit them for collection.

 
ADDITIONAL FEATURES OF THE SYSTEM

1. Reduce Returned Checks - since electronic checks take precedence at the customer’s bank you will reduce returned checks since they will be debited before paper checks submitted to the bank.

2. Data Base Memory – the first time a customer enters their check into the system you will enter all the needed customer info (name, address, Tel number, special notes, etc.) – each subsequent time the same customer check comes into the system all the data will automatically come up.

3. ASCII File Import & Export – you can export all file information in ASCII format to update accounts receivable, create reports, etc.

4. Networkable – the system can be used on a network with many users.

5. Easy to Use – the software is extremely easy to use. Installation is via CD Rom and each installation is accompanied by a full color instruction manual.

6. Tech Help – we have full technical support for the system.

7. Security – system can be encoded with password protection so that only authorized users can operate and transmit. In addition, the EFT Network directs all deposits via computer programming and we will only change it upon written authorization of qualified officers.

 WHAT DOES IT ALL MEAN?

• The paper check has been converted to an electronic check
  

• The ACH will transfer the funds electronically
  
• The business account will have the funds deposited in 24-48 hours
  
• Neither the business nor the bank has to process a single paper check
  
• no deposit slips to fill out
  
• no lost or stolen checks to worry about
  
• no more bank runs
  
• NSF (non sufficient funds) checks are quickly electronically represented
  
• All time periods are measured in bank business days - computer transactions do not take place bank holidays or weekends.

 
WHAT ABOUT NSF CHECKS?

• NSF checks are reported through the software to you in 5 business days.
  

• Once an item is officially reported to you as NSF we reverse the amount of that item out of your account.
  
• The payment centers can easily resubmit all NSF checks with a click of a button to transmit the items back to our processing center.
  
• The payment centers can also submit for collection fees on the NSF checks
  
• You can resubmit for collection two times after the original.

 BILLING:

Billing occurs at the beginning of each month for the previous month’s activities. We will notify you on or about the 5^th of each month of the invoice amount and directly debit your account approximately 10 days later.

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