How Does Electronic Check Conversion Work?
New machines allow companies to process checks electronically. Learn how.
Laura Adams, MBA
Â
Ask Money Girl: How Does Electronic Check Conversion Work?
Q. I recently wrote a check at a well-known retailer where they ran it through a machine and gave it back to me. How does this new system work?
Answer. If you use paper checks you’ll notice that an increasing number of companies and merchants are processing them electronically. It’s a process called electronic check conversion (ECC) where vendors use the information on your check to receive an automatic payment from your bank account—just like if you paid them using a debit or check card. It’s important to know that with an ECC you don’t have any float time. So, if you don’t have enough money to cover the check it could bounce and leave you with expensive fees from your bank, the merchant, or from both!
Image courtesy of Shutterstock
Â
About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.