American Banker’s Association; administers the standards for MICR encoded checks in the U.S.

Automated Clearing House; The network that processes electronic payments and is governed by NACHA (see definition below). 

A field in the MICR line of a check, identifying the amount of the check. The only field which is encoded after a check is written.

Accounts Receivable Conversion is the process by which a personal check may be converted to an electronic (ACH) payment for clearing overnight.

A six digit approval code returned at the point of sale terminal.  This code should be clearly written on the top of the check above the ‘Pay to’ line.

The Check Truncation Act for the 21st Century: This legislation, effective October 28th 2004, essentially gives an Image Replacement Document (IRD) the same legal status as a check. It allows checks to be converted to images at the point of presentment and clearing of the payment through the exchange of images.

Full payment of all checks meeting the simple guarantee requirements.  What the merchant is charged for this service is often called the “premium.”  A guarantee service can be viewed as “check insurance.”

A device used to read the MICR line located at the bottom of a check.  It is used to reduce errors Vs. manually inputting data and is recommended when speed is a priority.  The terminal is used to verify the account (from the check that has been read) against a negative database and also displays the authorization/denial/other code response to the merchant.

A measure of how many checks or the total dollar amount volume of checks has been presented within a period of time.  Velocity is used with Verification to alert and protect merchants from unusually high check activity.

The sending of check account information through a terminal to a national negative database so that the merchant can receive a response indicating authorization/denial/other.

Checks are paid to merchants on the 1st  & 15th of the month through “claims.”  This includes all non-guaranteed checks collected during the previous period as well as guaranteed checks. 

Decal stickers posted by registers alert customers that:  1)  returned checks may be electronically re-presented, 2)  service fees, as permitted by law, may be assessed, 3)  service fees may be submitted electronically or by paper draft.

A response received on the check terminal indicating the check account data matches data within the NCN (see definition below) national negative database, meaning the account has other returned/unresolved items.

Electronic Check Conversion

Electronic Funds Transfer

Deposit account information stamped or printed on the back of a check

Image Replacement Document; a reproduction of a check from a digital image of the original.  An IRD has the same legal status as the original check (per Check21 legislation).

The National Check Network; A national negative database used when verifying checks during purchase.  The verification terminal will decline a transaction if the account information read from the check is identified to match data within the national negative database.

Magnetic Ink Character Recognition.  On the bottom of most checks a special magnetic ink is used to imprint the routing, account, and check numbers.

National Automated Clearing House Association; the leading association for setting standards and providing solutions for electronic payments (ACH transactions).

An electronic file consisting of account information associated with returned checks

Non-Sufficient Funds means there was not enough money in the check-writer’s account to cover the check when it was presented.

Point of Purchase

Point of Sale

The amount charged monthly or annually for our services.

A check that was not honored by the check-writer’s bank (or in simpler terms:  any check that bounced).  Some reasons a check may be returned are:  Non-Sufficient Funds (NSF), Account Closed, Account Closed, & Refer To Maker.

A field in the MICR line of a check. Together with the Transit Field (the bank account number), it identifies the bank on which a check is drawn.

A field in the MICR line of a check. Together with the Routing Code (the ABA/Routing number), it identifies the bank on which a check is drawn.