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Rule Change: Business Checks Ineligible for Conversion
In November 2005, the National Automated Clearing House Association — The Electronic Payments Association (NACHA) introduced a change to the NACHA Operating Rules that provides simple methods for retailers to identify checks ineligible for conversion to electronic transactions. Effective September 15, 2006, the new rules identify checks valued at more than $25,000 or those that contain auxiliary on–us fields as ineligible for conversion.
Currently, rules for check conversion allow only consumer checks to be converted to electronic transactions. However, business and consumer checks are often the same size, making it difficult for retailers to identify those checks eligible for conversion. As a result, many business checks are incorrectly converted, causing added costs for retailers, incorrect bank statements for businesses and additional in–house processing work for financial institutions. The rule amendment will address this problem by providing simple guidelines for identifying business checks that are ineligible for conversion to electronic transactions.
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