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GUARANTEE ON CHECKS
A program which gives guarantee of
payment on your electronic checks is
called check guarantee. It is like an
insurance policy that is issued to the
merchant account holders. Some amount of
fee is charged to the merchant while
he/she exchanges the checks in the bank
that has been returned by the customer.
It is applicable on all types of checks.
The bank lends a helping hand to the
customers regarding their confusions.
There is no risk involved in the bank
for not accepting checks. The bank
accepts checks and charges commission as
well as makes keeps records of the
returned checks. The credit card
processing and acceptance costs as well
the cost for this check guarantee system
is similar. Due to the vital competition
among the banks, some of them offer at a
much lower price. The merchant account
provider may be of great help for any
type of queries and clarifications, if
needed.
Every check which is accepted by a
merchant is processed as well as
verified through the payment gateways
systems. A merchant can easily scan out
whether the check bearer has any
exceptional unpaid balances or credit
history or not. A check reader is used
to verify the checks by running it in
the electronic terminals but it is also
done by just putting in the information
of the checks and about the check
writer. The check guarantee company
issues an approval only if the terminal
shows that the bearer or the check
writer has no outstanding balances in
the existing system. Sometimes an
authorisation number is also provided by
the company stating that payment has
been already guaranteed for the existing
check. A merchant needs to collect the
customers’ detail that uses checks to
make payments. Certain information like
passport, address proof and phone
numbers are required as a record for the
database of the merchant about the
customers.
Guarantee on check is into existence for
a long time. The merchant are imposed
discount fees on all checks that they
accept when they go for bill discounting
in the bank. There are certain rules and
regulations set up by the Check
Processor Acceptance System (CPAS). 1.50
percent on the check value is charged to
the merchants for exchanging the
returned checks and also for discounting
of bills. The banks have a team of
technical experts who are always ready
to help the customers in whichever way
it is possible. They do not charge any
amount of money for the services. A
transaction fee of value $0.15 to $0.35
is charged as an extra service charge.
In merchant accounts like retail
merchant account, a monthly charge is
fixed for all the transaction that has
been carried out during the month. While
the retail account check processing is
processed, a statement fees is also
charged.
There is also another term for check
guarantee which is called check
guarantee with conversion. It not only
guarantees the payment but it also
converts the checks into electronic
funds. The funds wil be directly
deposited into the checking account
automatically. |
