How Do Businesses Use Telecheck?


Quick Answer

Businesses use Telecheck to ensure the validity of checks from customers and avoid loss of profit due to fraud or insufficient funds through the use of a special system that verifies the information of the check at the time of sale. This system allows businesses to offer checks as a payment method with a higher level of security and reliability.

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Full Answer

When a business signs up for the Telecheck service, it receives a check scanning device that functions in a capacity similar to that of a credit card machine in that connects to a database to immediately verify funds. When you wish to make a payment with a check, write the check as normal and hand it to the sales associate to place through the machine. The Telecheck scanner captures the account and routing numbers on the check, as well as the value, and sends an inquiry to the appropriate financial institution.

If the issuing bank has placed a hold on the account due to identity theft, then it rejects the check and prevents the withdrawal of any funds. The system also declines checks if the account holder does not have enough money to pay for the charge or if the check is not real. Part of the Telecheck system also includes processing the payments for the retailer, allowing it to keep the physical copies of the check and use the digital scan to initiate the transfer of money into the appropriate account.

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