How Electronic Checks Work ? Will Paper Checks Eventually Go Away?

Traditional checks probably won't disappear anytime soon, but processing checks electronically is sure to continue! Have you ever been asked to fill out your account and routing number when paying for something online or over the phone ? or have you provided a paper check to pay for something and it is given back to you after it is run through a machine? Did you scratch your head like I did the first time that happened?

Here is how electronic check conversion works. Instead of writing out a check the old-fashioned way, the new way of using checks use digital signatures for signing and endorsing and have digital certificates to authenticate the bank account. These e-checks are sent either by direct transmission using telephone lines or by public networks such as the Internet. The "endorsed" e-check with an electronic signature is then sent over the internet to the payee's bank for deposit.

Why are companies using electronic checks, you ask? Well, more stores are using e-checks because they work in the same way as traditional checks, and require very little "public" education on the process. Secondly, they are more cost effective, especially for corporate markets. And finally, they can be cleared easier than traditional checks.

What Does it Mean to Me that Companies are Switching Over to E-Checks?

A downside is that there is little or no "float" on your check. Basically, if you were to write a check today, you need funds in your account at the time you write your check to cover the payment. If funds are not available, the check may bounce and a fee may be assessed by the business.

It has been easy to get into the habit of writing out a check right before pay day, knowing that the check would not clear immediately. With the emergence of electronic check conversion, that reasoning no longer is true and it can easily mean trouble.

Who Uses Electronic Checks and How do I Know?

Everyone from gas stations to restaurants and internet websites may use electronic checks, and to know for sure, you must look for a notice. By law, you must receive notice that your check has been processed electronically. Notice can be given in the following ways:

• In a store, there might be a sign posted that says electronic checks are used.
• For mailed checks, businesses might include notice on a monthly statement or under the terms and conditions section of your agreement.
• In addition to the notice, information should also be provided from the company on how insufficient funds are collected and what the associated fee is for recovering those funds.

Do I Get My Check Back and Will the Payment be Shown on My Monthly Statement?

Your bank may be unable to give you a copy of your checks, so it is important to keep records of the checks written out ? duplicate checks are a great solution to this dilemma. If you run into a bind and need a copy of a check written to a merchant, check with that business, they may be able to provide it to you.

You payment must be shown on your monthly bank statement. It should include the name of the business, the payment amount and the date the payment was electronically transferred from your account.

What if There is an Error on Your Account or Unauthorized Transactions?

Be in the habit of reviewing your account regularly for errors. Did two payments go through instead of one? Were you charged the wrong amount? By law, you have 60 days from the date your statement was sent to you to notify your financial institution of any errors. Your bank may take up to 45 days from when you notify them to investigate the issue. Normally, your bank will credit your account while the investigation occurs.

Robb Ksiazek is a successful author and publisher for Checks-4U.com. He has researched and written hundreds of articles and can simplify your online search by recommending merchants for the best value and selections in business or personal checks, address labels, rubber stamps and envelopes.

---

Budgeting -- The Critical Flaw That Causes Most Budgets to Fail

Budgeting. It's a word we're all familiar with. Everyone knows... Read More

The World is Not Enough - Calling for a More Ethical Approach to Personal Finance

At a time when the entire world's attention is focused... Read More

Developing a budget? Watch out for Those Budget-Bursting Gremlins

If you've developed a household budget to get your spending... Read More

Personal Loans For Homeowners ? One Of The Numerous Rewards For Being A Homeowner

You no longer look at the pictures of homes cause... Read More

University: A Course in Personal Finance

Recent findings from the Educational Policy Institute indicated that the... Read More

UK Graduates Looking Short-Term At Their Long-Term Financial Responsibilities

With almost two thirds of university entrants from England and... Read More

Budgeting Your Way to Financial Freedom

Financial freedom cannot be achieved without budgeting. Budgeting involves tracking... Read More

One Income Source Is Not Enough!

My personal opinion is that in today's new economy, it... Read More

Bankruptcy Laws Get Tougher - More Expensive

If you've been thinking about filing for bankruptcy, your best... Read More

Money Saving Tips. Maximize Savings on Everyday Items!

Frugal living is more than a lifestyle. It's a passion.... Read More

UK Parents Inactivity Harming Their Children?s Future University and Mortgage Savings

The British government at the beginning of this year officially... Read More

Debt Management ? More Ways to Save on Gas Consumption

The price of gas continues to climb, and with continued... Read More

Honor Those Who Serve with Checking Account Supplies

Our global society has had a wake up call in... Read More

How to Obtain a Non ChexSystems Bank Account Without Being Scammed

Predatory lending exists in the mortgage industry. It's typically when... Read More

What Are We Teaching our 2005 Graduates about Money?

Now that we are in the month of June I... Read More

How to Save Money in a Grocery Store

Now there are ways to save money in the grocery... Read More

Planning Ahead with Your Finances

If you, like most people, have not seriously considered what... Read More

Five Secrets for Long-term Financial Success

Future financial success is not a guarantee that any one... Read More

The Joys of Address Labels

Address labels are many things to many different people. If... Read More

10 Money-Saving Tips

1. If you have your haircut every 3 weeks, try... Read More

Avoiding A Nightmare On Renovation Street

You've decided you want a bigger, better and more desirable... Read More

Top 10+ Ways to Jumpstart your New Year?s Finances!

Of course, these don't have to be done in any... Read More

Safely Save for Your Childs University Studies Using An Education IRA!

This investment retirement account (IRA) is useful to you as... Read More

Save Money on Groceries: Part I

One universal of humanity, no matter who you are or... Read More

How You Feel Affects How You Shop & How Much You Spend

Have you ever stopped to think about how your "mood"... Read More

Should You Borrow From Your 401(k) Account?

If you have a 401(k) account, it can be very... Read More

What is a Traditional IRA?

With a traditional Investment Retirement Account (IRA) you pay taxes... Read More

Budgeting Before Buying

With interest rates being at an all-time low, I can... Read More

Why Live Frugally

What is it about being frugal, why do it at... Read More

Eight Ways To Sink Yourself Financially

1. Don't focus on your finances.The reason most people get... Read More

Want Your Savings to Earn a Higher Rate of Return? Try Internet Banking

Doesn't it seem like the only impressive numbers we've seen... Read More

First Checking Account ? When is it Time?

We all know that money doesn't grow on trees, but... Read More

Save On Food - Ten Tips

To save on food, be an opportunist. Buy what you... Read More