By using the Check guarantee program you can be sure that you will be paid for your checks. It is a kind of insurance that is provided to merchants. A nominal fee is charged for this service which pays you on any check that is returned. The merchants will not have to worry about accepting payments in the form of cheques or collecting returned checks. Generally, this solution costs as much as credit card processing solutions cost you, but you may also get it at lower prices. You need to go shopping to get the best price.

This program works by verifying each check before you accept it. The company will inform you if there are any bad checks issued by the payer. This is done by passing the check through the check reader or manually keying in the check information. Then the system determines whether there are any outstanding checks or bad checks against the issuer. If the outcome is positive the company will issue an authorization number guaranteeing the payment for that check. You also need to get additional information about the writer of the check like phone numbers or license number.

This program is not new. The processor who is guaranteeing the checks charges a discount fee on every check they accept. The discount fee is about 1.5%. The advantage is that if any checks are returned then the guaranteeing company will pay for it. The fee charged varies by the associated risk and the merchant type; however it is never lower than 0.99%. You will also have to pay the per transaction fee of about $0.15 to $0.35. Just like with credit card processing, you have to pay a minimum monthly fee and also a statement fee. You may also have to pay an application fee and a programming fee. The check reader and POS terminal is required if you are processing at a retail store.

There is also another service: “Check Guarantee with conversion”. This service will not only guarantee your payments on your checks but it will also convert the checks in to electronic funds. Therefore, you don’t have to go to a bank to deposit the check.

How to get the best deal?

  • Search for reasonable statement fee and monthly minimums.
  • Search for the most number of payments each month. It ranges from 1 to 4 times.
  • Search for online reporting.
  • Search for a moderate check acceptance policy in the market.
  • Find out whether all kinds of checks are covered under this program.
  • Find out what happens in case of stop payments.
  • Getting a system with the check reader is better because the whole process will be automated.
  • Find out how many bad checks it will take to label your account as a high risk account.

You should first find out whether your business needs such a service and only if absolutely required you should sign up for it otherwise it will drain your profits away. Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.