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5 Things you must know about accepting a Check by Phone
By: Wayne Akey, Mon Oct 24th, 2005
Word Count= 457 Word wrapped to 60 characters-per-line
Please feel free to publish this article in your Newsletter or
on your Web site (with Resource Box Included and active
hyperlinks).
The 5 things you must know about accepting a Check by Phone,
Fax or Web
Accepting a check by phone, fax or web is a great way to
increase revenues, decrease collection headaches and offer new
payment options BUT there are several essential “things” that
you MUST know.
First let’s talk about all the great benefits: 1) You don’t have
to wait for a customer to mail in payment. 2) It’s a LOT less
expensive than a credit card. A credit card transaction always
involves a discount rate. Typically around 2.3% it means that
you pay that percentage of the transaction dollar amount as a
processing fee. 3) You find out about NSF or rejected
transactions must more quickly than a paper check-typically
within 2-3 days. 4) You can call a late payer and tell them “no
you don’t have to send out a check we will take your check right
now” 5) It’s safe for the business and the customer. 6) You
offer an alternative to credit card payments for those who are
at or over their limit OR do not have a credit card (there are
LOTS of people)
Now what you MUST know: 1) The funds transfer is not
“guaranteed”. With a credit card the funds for your transactions
are “booked” for you when you perform a transaction. A check by
phone (an ACH transaction-more info at www.ach-payments.com) is
a request that funds be transferred. The money may or may not be
in the customer’s account. The collection of NSF funds can be
automated to ease this burden as well as the availability of
front end checking account verification tools. 2) The governing
body of electronic transactions, NACHA (www.nacha.org), states
that a check by phone transaction be accompanied by notification
(or a recording of the transaction that can be accessed) of the
transaction to the customer. This notification can be done by
sending a postcard or email confirmation of the transaction. 3)
The customer has a 60 day revocation window to dispute the
electronic debit to their account. They may “charge back” the
monies debited (hence the NACHA rule that you have proof of
their assent to the debit). 4) You may not accept a business
check by phone. This rule is under review by NACHA. The issue
NACHA has is that the person on the phone for the business may
or may not have the authority to authorize an electronic debit.
You can obtain written permission from an authorized person at
that business to debit their account via the ACH network and in
that manner accept the check by phone. 5) Recurring debits to
the customer’s account are not allowed (NACHA again) based upon
voice obtained permission. Their must be some kind of written
permission from the consumer although a web based permission for
recurring debits would be acceptable.
So your business absolutely should consider implementing check
by phone payment functionality but keep these 5 things in mind
to make your business life easier.
©2005 by Wayne Akey
** If you choose to use this article please be kind enough to
email me at articles@ach-payments.com with the word "Article" in
the subject.
About the author:
ABOUT THE AUTHOR: Wayne Akey has helped numerous businesses
reduce costs and increase efficiency. Get your Free Ebooks on
"The Secrets of ACH Processing" and "How to Save over 80% on
Payment Processing" at http://www.ach-payments.com
