The transaction is electronically transferred through the ACH system where funds are debited directly from the customer's account and deposited automatically into the merchant's account usually within 48 hours. Debit transactions are processed through ATM networks, where a card number is required to link to the correct bank for payment. Check conversion employs existing infrastructure using MICR data from the check and running it through the ACH network. Consumers write more than 60 billion checks in the U.S. annually. Experts believe that total will grow to 70 billion by the year 2000.
Checks are here to stay.
Broad acceptance of this system is viewed by industry leaders as natural progression. Unlike debit cards, funds are moved within 48 hours of the purchase. By law, financial institutions regard customer information as highly confidential. A traditional paper check is handled by many people in the payment process before it ever gets to the bank. Check conversion means only the customer and merchant ever view account information.