Congress OK's Electronic Check CLearing Between Banks

Won't that also allow instant check clearing for online purchases? Sounds like a winner to me. I don't write checks anyhow.

Electronic check clearing sounds good to me.

Will this mean less time to clear checks? I like it.

Floaters will just have to stop floating.

Online already does debit instantly and no physical check is involved in that transaction.

What they are talking about here are how banks are required to handle checks that get mailed to people. The way they do it now is they get sorted, then sent to a central processing facility, then all the checks drawn on a particular bank are boxed and sent to that bank, then that bank either sends the physical checks back to you or just stores them for you.

This would end that requirement.

Damn the man.

From what I gather, this will eliminate floating which means more people will bounce checks to you since so many people do float which means more NSF fees to us as businesses and to the customers which means banks will make out like bandits, on top of the money they save with the ending of no more require physical check transfers.

Maybe at first, but people will catch on quickly and stop floating. If you need to float, use your credit card.

I say fuck it all -- cash and debit. The credit system will fuck up this whole country eventually...

Bust out the suitcase so I can really see how much money is in that badboy...

Online checking works like this:

1) The consumer enters their info from the bottom of their check (or from wherever) onto the payment page. They also enter an ID# in most cases (drivers license, military ID, or SSN)

2) The banking numbers are verified with a positive database to ensure the numbers are valid, then matched against the given ID# to ensure that the individual with the bank account is the individual on the ID.

3) Once the bank account has been deemed valid, the numbers are checked against a negative database of accounts with history of NSF's, fraud, etc.....

4) A message is sent back to the consumer saying the transaction has been approved or declined. (A dec may not mean that the funds are not there...it may simply mean that the bank account holder is a bad accountant and has a history of NSF's, in which case the software deems the transaction too risky and declines it.)

5) The merchant is notified that they have a new order....merchant deals with order accordingly.

6) All transactions from that day are sent via ACH to the Federal Reserve.

7) Within 48 hours (ususally 24) the processor is notified of any declined transactions. The processor notifies merchants and makes settlement adjustments.

8) The merchant is settled. (In cases of 24 hour settlement like we offer with PSeCheck, we float the money to the merchant, assuming the account holder is honest based on previously mentioned scrubbing techniques.)



The stuff talked about by the Senate does not affect us in any direct way. However, indirectly, people will become better accountants because of the absence of that float period. This is a positive situation for us because people will be more likely to check their funds before paying by check online. (Most people think the money is being debited immediately online and therefore the NSF level online is well below the brick-and-mortar level anyway)

Cheers
James

Yeap Me too

So no more cancelled checks when this system goes into effect? I prefer to receive the cancelled checks (original) to ensure no fraud was made on my account.

WG

Jacker you make some valid points.....however I think what KRL is getting at is that most banks don't send your cancelled checks back to you anymore, they store them for you and charge you to get a copy of one if you need it. (For proof of purchase or whatever)

Now those checks won't be stored by your bank, but by the bank they were cashed at.......so if you want to get a copy of your cancelled check not only will the delay probably be ridiculous, but now you'll have to pay a service fee to both banks. Banks already rape us in fees in the way they handle checks, they don't need any extra help from the government to rake in more funds from consumers.

That was my point exactly.

I guess the only way around it would be if the cashing bank is required to scan the check digitally and then transmit that scan image electronically to the originating bank.

Otherwise yep, I'll bet anyting they'll double dip us on fees and you won't be able to monitor check tampering and fraud as well.

Plus in the brick and mortar world a lot more people will lose the float and bounce checks which messes up everyone's accounts.

Lenny, I understand what you guys are saying now. I would think, though, that if they are going to allow an electronic approval system then they will also allow receipts for those checks to be printed by your institution. (maybe at a fee that rapes you....in which case the money goes back into the sock under my bed)

James

I definitely don't like this, makes fraudulent tampering with checks easier to do.

WG

my bank sends me my checks and i like it just like that, im sure if this law does pass that they will allow you to request to still recive them

when people start changing to banks that do that im sure all the other banks will notice and fall into suit

Where can I read the rest of this article?

Hey if this means no more 5 or 10 day hold every time i deposit a check over $10k, then I'm all for it

Likewise. I want my cancelled checks back.

Finally.

No more waiting 10 days for a check to clear.

KRL never posts links. He wants everyone to think he is some news god that has secret ties to everything.

It's his ego. Everyone has to be somebody.

Here is the story.

http://www.siliconvalley.com/mld/sil...ey/6963160.htm

http://news.google.com/

There's no need to post links if its the entire article.

And geez lighten up on the God stuff will you.