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A check conversion is a process by which a paper check is converted into electronic form and processed. When this occurs, a company usually takes a paper check and makes a copy of it. Then, it usually destroys the paper check and uses the information on the check to set the payment up for electronic processing. In many cases, this allows the check to be processed as an electronic funds transfer and makes the payment clear faster than paper checks normally do. The payer is usually not charged anything extra for the check conversion.
Many businesses use check conversion to process payments made by check. They take the information on a check and use it to create an electronic payment than can be withdrawn from the payer’s bank. This process is typically much faster for businesses. It doesn’t change very much for the payer, however, as the amount that is listed on the check is the same amount that is withdrawn from the payer’s account electronically.
Though a person may not notice much difference in a payment processed by check conversion, there is one thing that may stand out. Thanks to check conversion, it may not take days for a check to clear. Many clear in just a day or two. In fact, it is even possible for an electronic transfer of funds to take place on the day the check is presented. As such, the use of check conversion means people have to be more careful when writing checks and make sure they have the money available in their accounts at the time of payment.
When check conversion is used, it often starts when a person mails a paper check. The company that receives it usually makes a copy of the check and then proceeds to process it as an electronic payment. The paper check is usually destroyed once the copy is made. The money that is withdrawn from the payer’s account is usually listed on his bank statement along with other electronic payments, or in the same place as paper checks.
In some cases, check conversion is used for processing checks submitted for in-person transactions. For example, a person may hand a cashier a check as payment for the goods or services he has received. Instead of keeping the check, the cashier may use an electronic system to make note of the pertinent details, including the payment amount and the checking account number. After capturing this information, the cashier may then hand the check back to the payer to keep for his records or destroy as desired. The business that has received the check then proceeds with the conversion process.