Back-Office Conversion

Back-office conversion (BOC), allows retailers and billers who currently accept checks at the point-of-sale (POS) or at manned bill payment locations to convert checks to ACH debits in a centralized back office. Designed to streamline check processing, acceptance and conversion for financial institutions, businesses and retailers, BOC will result in fewer incorrect check conversions, reducing in-house processing and time spent correcting errors. Key elements include:

  • It allows retailers and billers who currently accept checks at the POS or at manned bill payment locations to convert checks to ACH debits in the back office.
  • The possibility for back-office conversion of consumer and business-sized checks valued at less than $25,000 and lacking an auxiliary on-us designation for opting out.
  • Prominent consumer notices via in-store signage and paper handouts from companies that intend to back-office convert paper checks.

What it means to you:

BOC will affect financial institutions, consumers, small businesses and retailers in different ways. Some financial institutions and retailers will implement BOC immediately, while others may choose to continue to use existing electronic check processing methods like accounts receivable conversions (ARC) and point-of-purchase (POP) methods.

For Financial Institutions

BOC may impact nearly every aspect of daily operations for financial institutions that enable this capability, including consumer service, call volume, employee education and training, internal check processing and destruction, and product and sales opportunities.

  • BOC streamlines the processing of paper checks, resulting in fewer incorrect business check conversions and a reduction in time spent correcting errors and managing related inquiries.
  • Changes in check conversion will affect the internal operations and fraud prevention processes, like Positive Pay, to incorporate the new types of check conversion.

For Consumers

Unlike other electronic check processing methods, BOC has little impact on consumer experiences.

  • It does not fundamentally change the existing experience in using checks at the register. There is no additional delay in the checkout process.
  • Electronic transactions will appear on a statement with a brief description, including important details like transaction date and amount, biller information and check serial number.
  • While it does not directly impact the length of time a check deposit takes to appear on financial statements, it is possible that funds will be withdrawn more quickly due to existing check conversion methods.

For Businesses

The changes in check processing will affect financial statements, experiences at the register and overall consumer processes for businesses.

It will give businesses an additional option when choosing how to convert customer checks and their own checks.

  • Businesses that use personal-size checks may choose to upgrade to a business-size document that contains an auxiliary on-us field to avoid conversion and maintain existing account reconciliation practices.
  • Checks that have been converted to electronic transactions will appear as brief descriptions, including the transaction date and amount, biller information and check serial number.

For Retailers

Retailers who elect to implement BOC will notice differences in nearly every aspect of the check process, including: acceptance, processing and storage, consumer service, and employee education and training.

  • It streamlines electronic check processing methods by allowing most consumer and business checks to be back-office processed. The new rules make it easier to continue to accept checks and implement the new exception rules.
  • By allowing checks to be processed in the back office, it will reduce register procedures and increase efficiency and speed at checkout lanes.
  • It does not require the capital expenditure of installing scanning equipment at every register. Only one unit needs to be installed in the back office of each store.
  • Retailers and billers who back-office convert paper checks must post a sign at the point-of-sale and note their intent on paper handouts distributed to consumers. These signs must include a customer service phone number, established to address consumer questions and concerns regarding BOC.
  • It requires retailers or third-party processors to securely destroy paper checks converted in the back office. There is no required timeline for this destruction.