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An Overview of TeleCheck Products and Services
If you are a business owner and accept credit cards for payments, you may be considering check processing as a way to offer an additional payment option to your customers. There are several check processing companies but the oldest and most popular check processor is TeleCheck. For over 40 years, TeleCheck (now part of the First Data Corporation which offers credit card processing solutions) has provided industry-leading products and services to businesses. But exactly what products and services does TeleCheck offer? Below is a high-level review of the most popular TeleCheck products and services and how they can be incorporated into your business.
Electronic Check Acceptance
This is a highly promoted and effective TeleCheck product. Electronic Check Acceptance, or ECA, affords merchants the convenience of having funds electronically deposited into their bank accounts. The process flow, from the merchant standpoint, is rather simple: the customer provides the merchant with a check for goods or services, the check is processed through a compatible terminal and two receipts are printed – one that the customer signs authorizing the payment to be electronically debited from his or her bank account. The merchant keeps this receipt as a record of the transaction. The second receipt is given to the customer along with his or her voided check.
ECA is available with two services – Warranty and Verification. With the Warranty service, TeleCheck guarantees the funds should the check return. That is, TeleCheck will cover the amount of the transaction – up to TeleCheck’s warranty limit for the product (contact TeleCheck for specifics). TeleCheck will also pursue collections from the check writer thus freeing the merchant from this time-consuming task. TeleCheck does not access bank accounts to verify the check writer’s balance before approving a transaction. When TeleCheck approves a transaction, the terminal has accessed TeleCheck databases to determine if the check writer has any documented negative check writing history. If the check writer does not have negative history, the transaction is approved. If the check writer does have documented negative check writing history, the transaction is declined. The Verification service also determines if the check writer has a negative check writing history and will grant either an approval or denial. If the transaction is approved but the check returns, TeleCheck will not cover the amount of the check. The merchant is responsible for pursuing the customer for collection.
ECA is only compatible for merchants who have a storefront and accept payments face-to-face. The terminal will prompt you for the customer’s driver’s license. Note: if this prompt is bypassed, the merchant will still receive the approval or denial, but will be instructed to keep the check for deposit. This means the merchant will have to physically deposit the check into his or her account. Terminal prompts should not be bypassed because they are there for the merchant’s benefit. Merchants may be uncomfortable with requesting ID, especially from long-time customers, but it is necessary for the product and service to function correctly.
Paper Check Acceptance
With Paper Check Acceptance, the funding is not electronic. The merchant will need to deposit checks into his or her bank account. The check is processed via the terminal and an approval or denial is granted based upon the customer’s check writing history, not the funds available in his or her bank account. If the merchant elects the Warranty service and the check returns, TeleCheck will cover the amount of the check (up to TeleCheck’s Warranty limit – contact TeleCheck for specifics) and initiate collections from the check writer. If the Verification service is chosen, the merchant is responsible for pursuing collections.
Well, you might think after reading this, checks are mailed in to my business or left in a drop box. TeleCheck can’t work for me. Not so fast….
TeleCheck also offers a Lockbox product specifically for checks that are mailed in or left in a drop box. With Lockbox, customer ID is not required. It is an electronic product, meaning the merchant will not need to deposit the checks into his or her account because he or she will be funded electronically. Note: This product is only compatible with consumer checks. If a business check is presented via Lockbox, the merchant will be prompted to keep the check for deposit. This is not a TeleCheck stipulation; it is a National Automated Clearing House Association, or NACHA, rule. Merchants are asked to keep checks for at least two weeks before destroying.
This product is also available with either the Warranty or Verification service.
Internet Check Acceptance
Have a website with a checkout? Then TeleCheck’s Internet Check Acceptance, or ICA, may be the product needed to offer customers an additional payment option and protect against bad checks. With this product, the merchant never receives the check. The customer enters his or her check and ID information at the time of checkout. An approval or denial is granted based upon the check writer’s check writing history, just like ECA and Lockbox. And, also like ECA and Lockbox, the merchant is funded electronically. This product is available with either Warranty or Verification service. In order to successfully integrate this product, the merchant will need a working website and a compatible gateway. First Data Global Gateway is the highly recommended and most popular gateway for this product.
This product does not negate the need for a terminal for face-to-face storefront transactions. This product is not a workaround for not wanting to purchase a terminal. At this time, First Data Global Gateway does not offer a product for face-to-face check transactions. The gateway is only for virtual products like ICA and…
Checks By Phone
This product, also known as CBP, is for merchants who accept payments over the phone for goods and services. Rather than mail in a check, the customer provides his or her checking information and identification over the phone. The merchant then enters the payment on their website via the First Data Global Gateway or via a web-based virtual terminal. The merchant never receives the customer’s check. An approval or denial is granted. If approved, the merchant is funded electronically. This product is also available with either Warranty or Verification service.
Bad Experiences With TeleCheck
You may have heard of other businesses that have had negative experiences when attempting to set up TeleCheck. Ninety percent of this has been the result of the merchant being sold a product that does not meet or is not compatible with his or her business needs. Unfortunately, many of the sales representatives offering TeleCheck do not have a firm understanding of its products and services. A TeleCheck installation can be a smooth process if the following steps are taken:
- Sales representatives have a full understanding of how the merchant accepts transactions. Find out from the merchant if he or she only accepts checks in the mail. Ask what percent of the checks he or she receives are business checks. These are important factors when deciding the appropriate TeleCheck product for businesses. For example, business check processing or Corporate ECA is an additional service for ECA. If the merchant wants to cash payroll checks, then Check Cashing is available. It is a separate product from ECA, not an additional service.
- Confirm the equipment the merchant has or will be purchasing or leasing is compatible with the TeleCheck product and service being installed. Just because a terminal is compatible for card processing doesn’t mean it will process checks.
- Provide the entire TeleCheck Service Agreement, including the Terms and Conditions to merchants. In most instances, TeleCheck is a separate agreement from the card processing agreement. Merchants should request this information and not depend solely on the sales representative’s explanation of the service.
- If the merchant doesn’t have a business need for TeleCheck, don’t sign him or her up for the service. The TeleCheck Service Agreement is a legal agreement and the merchant may be bound to its terms and conditions, even if the service is never used.
Admittedly, installing TeleCheck can be an arduous and frustrating process if the incorrect product and service is chosen. Or, if there isn’t a full understanding of how TeleCheck can help merchants grow their businesses. Hopefully, these Telecheck product and service overviews will help one choose the correct product for his or her business. To reach TeleCheck directly to discuss how to implement check processing services for your business, call 800-366-1054 option 3.