High Risk Check Processing

High Risk Check Processing

How can you get a high risk check processing account?  The key is to think outside the ACH box.

Electronic checks are the most popular alternative payment method chosen by consumers.  Merchants in high risk industries increase sales simply by offering electronic checks as a payment option at checkout.

In the old days, merchants could rely on the ACH network for high risk check processing.  It was an old, slow, reliable batch-oriented system for clearing electronic transactions. But, even in the best of times, it was not designed for the special needs high risk check processing.

The ACH network is governed by NACHA operating rules. These rules have always been restrictive for high risk merchants. There are all types of return codes. The operating rules are hundreds of pages long, complex and hard to understand.

The ACH network has always been challenging for all but the most mundane merchants such as utility or insurance companies. Deciphering and interpreting the rules took time and sometimes expert (and expensive) professional advice.

In the past few years, the NACHA rules have tightened significantly. As a result, High Risk Check Processing through the ACH network is now almost impossible.

Indeed, even traditional businesses are having a difficult time complying with NACHA rules. Chargebacks must be kept under 1% 2%. Returns are closely monitored.

With the current economic climate, 3rd party ACH processors are being driven out of business. And underwriting for ACH accounts by the remaining processors is becoming more restrictive every day.

Still, it’s important to be able to accept echecks as payments. Merchants who offer electronic checks as payment experience sales lifts of 8-20%.

New technology based on Check 21 legislation is the best method of processing high risk checks.  Modern techniques have created solutions which free you from the restrictive ACH network. Improved processing methods provide valuable benefits for high risk merchants that want to offer electronic checks as a payment option.

With the new solution for high risk check processing, transactions no longer go through the ACH network, although the Federal Reserve still clears the checks. There is no more waiting 3-4 days for a transaction to clear and up to 7 days to settle.

Instead, checks are cleared by bank-to-bank transfer. Since there is no middleman, checks clear in 1 day or less. Funds are settled into your account within 1 day.

Checks are cleared faster; therefore, the risk of NSF is decreased. Fraudulent transactions are discovered sooner. Chargebacks are drastically reduced. Saving you money and streamlining business operations.

With modern high risk check processing, you own the depository account. Settlement of cleared checks is directly into your account not into a 3rd party ACH processor account. You control your money and improve access to your working capital

But, wait. It gets better. There are no reserves. That’s right. By using high risk check processing technology, you eliminate needless and expensive hold-backs by an ACH processor.

Processing the old-fashioned way, reserves were required because the ACH processor acted as a middleman.  In order to protect itself from liability, the processor assessed reserves against the merchants.  Reserves were lost if the ACH processor went out of business or simply decided not to return the reserve.

Smart merchants realize that new technology properly deployed is one secret of business success.  Use the power of technology to take control of your High Risk Check Processing today.