Chapter 1: Introduction to OTCnetOTCnet Participant User Guide

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Chapter 4 Managing Your Agency's Hierarchy Accounting Codes and Processing Options

Bureau of the Fiscal Service

	Bureau of the Fiscal Service

Chapter 1: Introduction to OTCnet

Check Capture and Check Processing

User guide section												

Table of Contents

Overview, Topics, and Audience1

Overview1

Topics1

Audience1

Topic 1. Introduction to OTCnet2

Overview2

OTCnet Elements2

OTCnet Process Flow: Check Capture, Check Processing and Reporting4

What is ACH?5

What is Check 21?5

OTCnet Process Flow: Deposit Reporting7

OTCnet Process Flow: Card Processing7

OTCnet Process Flow: Self-Service Kiosk: Check Payment8

OTCnet Process Flow: Self-Service Kiosk: Deposit Processing9

OTCnet Process Flow: Self-Service Kiosk: Card Processing10

OTCnet End Users11

Topic 2. OTCnet User Roles13

Agency User Role Combinations20

Financial Institution (FI) User Role Combinations22

System Tasks by Agency and Financial Institution (FI) Roles23

Summary30

List of Figures

Figure 1. OTCnet Elements3

Figure 2. Check Capture, Check Processing, and Reporting Process Flow5

Figure 3. Deposit Processing Workflow7

Figure 4. Card Processing Workflow8

Figure 5. Self-Service Kiosk: Check Payment9

Figure 6. Self-Service Kiosk: Deposit Processing Workflow10

Figure 7. Self-Service Kiosk: Card Processing Workflow11

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List of Tables

Table 1. FedACH and Check 21 Payment Types6

Table 2. End User Roles12

Table 3. OTCnet Agency and FI/FRB User Roles13

Table 4. Combinable Agency Deposit Processing User Roles20

Table 5. Combinable Agency Check Capture User Roles21

Table 6. Combinable Financial Institution User Roles22

Table 7. Deposit Processing and Reporting Roles23

Table 8. Check Capture Roles24

Table 9. Check Processing26

Table 10. Card Processing29

Glossary

Click this link to access the full OTCnet Glossary.

1									         User Guide Category								

1

	Administration 

## Overview, Topics, and Audience

### Overview

Welcome to *Introduction to OTCnet Overview and OTCnet Course Content*. In this chapter, you will learn:

The introduction to OTCnet

OTCnet User Roles

### Topics

The topics in this chapter include the following:

OTCnet Elements, Process Flows and End Users

OTCnet User Roles

### Audience

The intended audience for the Introduction to OTCnet includes:

Administration Users

Deposit Processing and Reporting Users

Check Capture, Check Processing and Reporting Users

Card Processing Users 

Viewers

## Topic 1. Introduction to OTCnet

### Overview

The Bureau of the Fiscal Service (BFS) Over the Counter Division (OTCD) provides the Over-the-Counter Channel Application (OTCnet) to facilitate the prompt electronic processing, reporting of deposits and transaction activities. OTCnet financial services include retail transactions made at agency offices, face-to-face collection points, and point of sale (POS) locations throughout the US and abroad.

OTCD oversees the systems, networks and program infrastructure which enable world-class OTCnet financial services including the collection of checks, cash, coins and credit, debit, and gift card transactions at agency POS locations around the globe. The OTCD is responsible for implementing a coordinated government-wide strategy for the collection of over-the-counter transaction and deposit activities (cash, card, check, foreign checks/currency, seized currency), and the transition from paper checks to electronic mechanisms.

OTCnet is a secure web-based system that enables federal agencies to integrate check conversion, deposit reporting, and card processing, so that all check, cash, coin, and card deposits to the TGA are handled by one web-based application. 

OTCnet offers agencies superior customer service and high-quality e-commerce solutions for collections and reporting needs.

OTCnet Financial Services includes the following:

Electronic processing of US checks presented for cashing, payment, or deposit

Processing of US currency, foreign currency cash and foreign check item deposits

Acceptance of credit, debit, and gift cards (Visa, MasterCard, American Express, Discover)

Support of the Self-Service Kiosk

Automation of the collection and settlement process

Support of online reporting and research capability for reconciliation and inquiries

Improvements of deposit history record keeping

### OTCnet Elements 

OTCnet is comprised of five elements: 

1. *Administration

Check Capture, Check Processing and Reporting

Deposit Processing and Reporting

Card Processing

Self-Service Kiosk: Web Service 

*Administration functions support Check Capture, Check Processing and Reporting, Deposit Processing and Reporting, Card Processing, and Self-Service Kiosk as shown in Figure 1.

Figure 1. OTCnet Elements

The functions of the five elements are:

**Administration, Installation Set Up and Management**: allows for those with administrative permissions to install, setup users, and manage OTCnet

**Check Capturing, Check Processing**: converts personal and business checks into electronic fund transfers. Transactions include consumer, consumer accounts receivable, and business transactions

**Deposit Processing**: permits federal agencies the ability to create and submit deposits for confirmation. This platform also allows for Financial Institutions (FIs) to confirm those deposits and create adjustments electronically. Deposits are created for US currency, foreign cash, and foreign check items

**Card Processing**: allows agencies to provide their customers an option to make payments via credit/debit cards and gift cards 

**Self-Service Kiosk**: third party vendor standalone kiosk supported by OTCnet

### OTCnet Process Flow: Check Capture, Check Processing and Reporting

Check Capture and Check Processing involve converting paper checks received over the counter or through the mail into electronic debits to the check writer’s account. The process is highly automated and greatly improves the collection, reconciliation, research, and reporting processes associated with Federal Agency check collections. 

In OTCnet, your Agency scans a check, and the check scanner captures an image of the front and back of each check. In OTCnet Online, the image is available immediately; in OTCnet Offline, the image is stored locally. You can also access Collections Information Repository (CIR) to retrieve deposit information.

The captured image of the check is stored for seven years in OTCnet. You can search the check images as well as the check capture and transaction date throughout the Check Image and Research Archive (CIRA) Query feature within OTCnet.

OTCnet sends summary as well as detailed information to CIR for those agencies that are not processing tax transactions.

CIR sends accounting entries with Treasury Account Symbol/Business Event Type Code (TAS/BETC) or Classification Keys (C-Keys) to Central Accounting Reporting System/ Government Wide Accounting (CARS). CARS invokes Shared Account Module (SAM) to either validate, translate, or default the TAS/BETC based on the accounting information received on the transaction.

OTCnet sends the captured check data to Debit Gateway at the Federal Reserve Bank Cleveland (FRB-C). FRB-C/Debit Gateway sends the data and settles to the appropriate Financial Institutions (FIs) either through FedACH (personal check) or Check 21 (non-personal check) where the check was written. All non-personal items are processed via Check 21.

The FI where the check was written shows the account was debited (Complete Check Capture and Check Processing and Reporting Process flow as shown in Figure 2 ). 

If your Agency uses the Master Verification Database (MVD) (which provides downloads of prior negative check information and blocked items) and is working offline, the information is passed to the agency's Local Verification Database (LVD) when each batch is closed. The LVD is then used to determine the check writer's status and implement your Agency's bad check policy, if applicable.

Figure 2. Check Capture, Check Processing, and Reporting Process Flow

### What is ACH?

The ACH Network is a nationwide batch-oriented electronic funds transfer system governed by the NACHA (National Automated Clearing House Association) operating rules which provide for the interbank clearing of electronic payments for participating depository financial institutions. The Federal Reserve and Electronic Payments Network act as ACH Operators, central clearing facilities through which financial institutions transmit or receive ACH entries. ACH payments include:

Direct Deposit of payroll, Social Security and other government benefits, and tax refunds

Direct Payment of consumer bills such as mortgages, loans, utility bills and insurance premiums

Business-to-business payments

E checks

E commerce payments

Federal, state, and local tax payments

### What is Check 21?

Check 21, also known as ‘Check Clearing for the 21st Century’ Act, was signed into law on October 28, 2003. Provisions of the law took effect on October 28, 2004. It is important to understand the effects of Check 21 on OTCnet. Check 21 provides the legal framework for the creation of substitute checks, which can be used in place of the original paper document, without an agreement in place with other financial institutions. A substitute check is a paper reproduction of the original check. 

To meet legal requirements, a substitute check must:

Contain an image of the front and back of the original check.

Bear a legend that states, “This is a legal copy of your check. It can be used the same way you would use the original check.”

Display a MICR line containing information appearing on the MICR line of the original check.

Conform in paper stock, dimension, and otherwise, with generally applicable industry standards for substitute checks.

Be suitable for automated processing in the same manner as the original check.

Overall, this legislation has modernized the nation’s check payments system. Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation. 

ALL payment instruments are eligible for processing under OTCnet, including business checks, money orders, Treasury checks, credit card checks, traveler’s checks, cashier’s checks, official checks, third-party checks, payroll checks and checks drawn on state or local government. 

Check 21 requires financial institutions to accept a substitute check from a presenting institute and grant it equivalent status as the original check if the substitute check meets prescribed requirements. It also requires a reconverting bank to meet the warranties and indemnities enacted through the legislation and subsequent regulations. Check 21 requires financial institutions to provide education to individual consumers on substitute checks and consumer re-credit rights. 

For more information on Check 21, visit: https://www.frbservices.org/education/products-services-education/check21-act.html

Acceptable forms of FedACH and Check 21 payment types are shown in Table 1.

Table 1. FedACH and Check 21 Payment Types

### OTCnet Process Flow: Deposit Reporting

Deposit Processing electronically collects and automates US and Foreign funds which facilitates the classification of Treasury collections daily.

As shown in Figure 3, the Deposit Preparer, or Agency, electronically reports the deposit to Treasury using OTCnet and prints out the OTCnet deposit ticket. The bank deposit ticket, OTCnet deposit ticket, cash, and checks (US and foreign) are taken to your Treasury General Account (TGA) Bank. At the TGA Back, the Deposit Confirmer confirms the deposit, rejects the deposit, or creates an adjustment to the deposit using OTCnet. 

OTCnet sends commercial deposit voucher information to CIR. CIR receives commercial deposit information from OTCnet for reconciliation and transmits to Treasury Cash Management System (TCMS) for cash concentration purposes. TCMS receives the commercial deposit data from CIR and initiates the cash concentration activity.

The Deposit Preparer and Deposit Viewer can access OTCnet to view their deposit ticket information, as well as access reports, receive rejections, and view adjustments.

Figure 3. Deposit Processing Workflow

### OTCnet Process Flow: Card Processing

Card processing is a web-based functionality that provides agency customers with an option to make payments with a credit, debit, or gift card. Card transactions are sent directly to WorldPay.As shown in Figure 4, the Agency initiates the Card Processing payment. Currently, OTCnet does not store any card transaction details. The Agency can access Collections Information Repository (CIR) to retrieve deposit and card payment information. 

The customer pays with a credit/debit card or gift card at an agency terminal station. The customer authorizes the amount to be charged to their account. The Verifone/OTCnet terminal sends the transaction data to Worldpay for authorization. 

Worldpay processes the payment in four steps:

Step 1 - Authorization (Real Time) Worldpay sends the transaction data to the card issuer through the card networks (e.g., Visa, Discover, Amex and Mastercard). The card issuer determines whether funding is available and returns authorization through the card networks to Worldpay.

Step 2 – Clearing Funds in the daily transaction batch are cleared from Worldpay to Comerica Bank. The processing cut off for credit card payments is 4:30 AM and 2:00 AM for debit card payments.

Step 3 – Settlement The card issuer sends the settlement money back to Worldpay via the card networks once the payments have been authorized and cleared. The timing varies by credit/debit network for when the settlement money is sent back to Worldpay.

Step 4 - Deposit Reporting If the payment is approved, Worldpay sends deposit voucher transaction data to CIR via the Worldpay flat file the following morning between 4:00 AM - 6:00 AM. 

CIR sends the voucher information to Treasury Cash Management System (TCMS). TCMS uses National Settlement Service (NSS) to draw funds. NSS transfers funds to the TGA Bank NY/FRB and reconciles them with Worldpay/Comerica Bank.

Figure 4. Card Processing Workflow

### OTCnet Process Flow: Self-Service Kiosk: Check Payment

Self-Service Kiosk: Check Processing is a web-based functionality that provides agency customers with an option to make payments with a check at kiosk. The Kiosk Operator sets up the workstation and Kiosk Tablet daily by logging in to and locking down the Kiosk Tablet.

As shown in Figure 5, the kiosk captures the image of the front and back of each check. Kiosk: Image stored on the kiosk server. The images will be uploaded to the OTCnet server on a scheduled basis. The Agency accesses OTCnet for Check Processing reports. The agency can also access Collections Information Repository (CIR) to retrieve deposit information.

The captured image of the check is stored for seven years in OTCnet. An agency can search for check images as well as the check capture and transaction date throughout the CIRA (Check Image and Research Archive) Query feature within OTCnet. OTCnet sends the captured check data to Debit Gateway at the Federal Reserve Bank Cleveland (FRB-C). FRB-C/Debit Gateway sends the data and settles to the appropriate Financial Institutions (FIs) either through FedACH (personal check) or Check 21 (non-personal check) where the check was written. The FI, where the check was written, shows the account was debited.

OTCnet sends summary as well as detailed information to CIR for those agencies. CIR sends accounting entries with Treasury Account Symbol/Business Event Type Code (TAS/BETC) or Classification Keys (C-Keys) to Central Accounting Reporting System (CARS). CARS invokes Shared Account Module (SAM) to either validate, translate, or default the TAS/BETC based on the accounting information received on the transaction.

Figure 5. Self-Service Kiosk: Check Payment

### OTCnet Process Flow: Self-Service Kiosk: Deposit Processing 

Self-Service Kiosk: Deposit Processing is a web-based functionality that provides agency customers with an option to make US cash payments at a kiosk. The Kiosk Operator sets up the workstation and Kiosk Tablet daily by logging in to and locking down the Kiosk Tablet.

As shown in Figure 6, the customer (kiosk user) makes US cash payments using the kiosk. The kiosk sends the deposit information to OTCnet with draft status. OTCnet creates a deposit voucher for the kiosk’s cash payment transactions with accounting code information. The Agency logs in to OTCnet to classify, approve and submit the voucher to the agency’s FI and can view the Deposit Process report. The cash goes to the bank.

The Agency can also access Collections Information Repository (CIR) to retrieve deposit information. The FI verifies and confirms the deposit in OTCnet. OTCnet sends vouchers information to Collections Information Repository (CIR). CIR sends the voucher information to Treasury Cash Management System (TCMS). TCMS uses National Settlement Service (NSS) to draw funds.

Figure 6. Self-Service Kiosk: Deposit Processing Workflow

### OTCnet Process Flow: Self-Service Kiosk: Card Processing 

Self-Service Kiosk: Card Processing is a web-based functionality that provides agency customers with an option to make payments with a credit, debit, or Visa/Mastercard gift card at an agency terminal station. Card transactions are sent directly to WorldPay. The Kiosk Operator sets up the workstation and Kiosk Tablet daily by logging in to and locking down the Kiosk Tablet.

As shown in Figure 7, payments can be made with a credit/debit card or Visa/Mastercard gift card at the kiosk. The customer authorizes the amount to be charged to his/her account. The kiosk sends transaction data to Worldpay for authorization. 

Worldpay processes the payment in four steps:

Step 1 - Authorization (Real Time) Worldpay sends the transaction data over to the card issuer through the card networks (Visa, Discover, Amex and Mastercard). The card issuer determines if funding is available and returns authorization back through the card networks to Worldpay.

Step 2 – Clearing Funds in the daily transaction batch are cleared from Worldpay to Comerica Bank. Processing cut off for credit card payments is 4:30 AM and 2:00 AM for debit card payments.

Step 3 – Settlement The card issuer sends the settlement money back to Worldpay via the card networks once the payments have been authorized and cleared. The timing varies by credit/debit network for when the settlement money is sent back to Worldpay.

Step 4 - Deposit Reporting If the payment is approved, Worldpay sends deposit voucher transaction data to CIR via the Worldpay flat file the following morning between 4:00 AM - 6:00 AM.

CIR sends the voucher information to Treasury Cash Management System (TCMS). TCMS uses National Settlement Service (NSS) to draw funds. The kiosk sends the card transaction data to OTCnet via the card webservice. NSS transfers funds to the TGA Bank NY/FRB and reconciles with Worldpay/Comerica Bank. The Agency accesses OTCnet for Card Processing reporting. The Agency can also access Collections Information Repository (CIR) to retrieve deposit information.

Figure 7. Self-Service Kiosk: Card Processing Workflow

### OTCnet End Users

There are four functional areas of the OTCnet application:

1. Administration

Check Capture, Processing and Reporting

Deposit Processing and Reporting

Card Processing

The user role you hold is based on the types of tasks you will perform.

Administration user roles, with varying degrees of permission, and perform administrative duties such as user management and system installation. 

Check Capture/Check Processing and Reporting user roles perform functions to capture checks, process checks, access reports and edit or view the Master Verification Database (MVD). 

Deposit Processing and Reporting user roles create deposits, approve, confirm (reject or adjust), and/or view information as shown in Table 2.

Card Processing user roles perform functions to process card transactions.

Table 2. End User Roles

*Batch Approver and Batch Uploader are sub-roles assigned to users with existing roles.

## Topic 2. OTCnet User Roles

Individuals are granted user access based on their job roles. Agency and Financial Institution/Federal Reserve Bank (FI/FRB) user roles are listed in Table 3 below with corresponding descriptions of job roles, the user roles that may assign the access, and whether the user can access Check Capture, Deposit Processing, or Card Processing functions.

Table 3. OTCnet Agency and FI/FRB User Roles

### Agency User Role Combinations

As shown in Table 4 and Table 5 Agency Deposit Processing, Check Capture and Card Processing user roles can be combined and assigned to an individual user. “•” indicates that the role in the column heading can be combined with the role to the far left of it. 

Table 4. Combinable Agency Deposit Processing, Check Capture and Card Processing User Roles

Table 5. Combinable Agency Check Capture and Card Processing User Roles

### Financial Institution (FI) User Role Combinations

Financial institution user roles that can be combined and assigned to an individual user are shown in Table 6. “•” indicates that the role in the column heading can be combined with the role to the far left of it.

Table 6. Combinable Financial Institution User Roles

### System Tasks by Agency and Financial Institution (FI) Roles

The two tables below show the system tasks that can be performed by Agency and Financial Institution/Federal Reserve Bank (FI/FRB) user roles as shown in Table 7**Error! Not a valid bookmark self-reference.** and Table 8. “•” indicates that the user role shown in the column heading can perform the task listed to the far left of it.

Table 7. Deposit Processing and Reporting Roles

This next table specifies OTCnet Check Capture Roles and corresponding permissions at the Agency level.

Table 8. Check Capture Roles

The OTCnet Agency Check Processing user roles and their associated permissions are shown in Table 9.

Table 9. Check Processing

*CIRA Viewer, View Reports, and Batch Approver are sub-roles assigned to users with existing roles.

**Download Release – includes downloading firmware, OTCnet Offline software, the OTCnet Local Bridge (OLB) application, and Security Updates.

Table 10. Card Processing

*The Card Uploader is a Self-Service kiosk-server system role that is authorized to transmit card data from an external kiosk system to OTCnet. This role requests acknowledgement of the data transmitted; the system account with this role has no other permissions. 

## Summary

In this chapter, you learned: 

OTCnet Background and Organization

OTCnet User Roles

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