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WHAT IS CHECK VERIFICATION, HOW IT WORKS
AND THE FEES INVOLVED
“Check Verification” is a procedure in
which check writers and checks are
screened against a database or “negative
database” that contains “bad cheque
writers”. The process is carried out at
the POS or “Point of Sale”, when a
cheque is presented by the customer for
paying his bills. This procedure is
carried on by utilizing a point of sale
or POS terminal or a real time online
process to access 1 of the many big
negative databases, which contains bad
check writers and bad checks, and
compare this transaction against the
black list. If the customer’s name is
present in the black list, the
transaction will not be accepted. If the
customers name is not present in this
negative database for bounced cheques,
then the transaction is approved. Such
verification transactions cost the
merchant about $0.15 to $0.35 per check.
There will also be an application or
sign up fee and also includes a
programming fee for the purpose of
installing the service at the merchants
POS or point of sale terminal. Some
companies will also have a minimum
monthly fee and also a statement fee,
particularly when you are dealing with
retail cheque processing accounts. A
“point of sale” or POS terminal is
necessary if you want to process retail
hardware solutions. The cheque reader is
an optional device, but you can also
purchase virtual or online terminal
solutions which are available in the
market now, if your business requires
such a facility.
If you want to accept debit cards and
checks without the risk, a verification
service is all that your business will
need. If you sign up for Check guarantee
service also, then you will
unnecessarily be paying more than what
is needed to avert the risk. Unless your
business is making a large volume of
sales every month which justifies the
extra cost for signing up for a check
guarantee service, you should stick with
check verification.
“Cheque Verification with conversion”
service not only verifies your check but
also converts it in to electronic funds.
It means that the check does not have to
be deposited manually in the checking
account; the money will get transferred
electronically in to checking account,
automatically.
Getting the best deal for check
verification
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Search for the biggest national
negative database that is available
in the market. There are less than
ten firms which are really large.
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The negative database should have
the largest following of merchants
around that geographic region.
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A verification system which contains
not only negative data, but also
positive data will be more efficient
and helpful for your purpose.
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Search a verification system which
has complex “rule sets”; these are
small software programs which
utilize the process of logically
analyses to find and screen out
undesirable risks.
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Online reporting should be present
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If possible get a verification
system that has a check reader along
with it so that the process is
automated.
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