DEFINITION of 'Check Conversion'

A reformatting service offered by banking merchants. Check conversion allows banks to convert paper checks into electronic ones and then send them to the appropriate receiving bank. The electronic check is forwarded on via the automated clearing house.

BREAKING DOWN 'Check Conversion'

This service is popular with merchants because it allows them to clear the checks they get much more quickly. The quickness of the electronic format eliminates much or all of the time spent waiting for a traditional paper check to clear. Furthermore, electronic checks are always processed before paper ones. This service is also known as accounts receivable conversion.

RELATED TERMS
  1. Electronic Check

    A form of payment made via the internet that is designed to perform ...
  2. Regional Check Processing Center ...

    A local Federal Reserve facility where checks that are drawn ...
  3. Check

    A written, dated and signed instrument that contains an unconditional ...
  4. Check Representment

    A system wherein a check that bounced or did not clear when it ...
  5. Accounts Receivable Conversion ...

    A process that allows paper checks received in payment for an ...
  6. Negative Float

    The period of time between when a bank customer writes a check ...
Related Articles
  1. Personal Finance

    Explaining Checking Accounts

    A checking account is an account at a financial institution, usually a bank, that allows for deposits and withdrawals.
  2. Personal Finance

    How to Cancel a Check

    If you've had a personal check lost or stolen, the next best step is to cancel the check by calling your bank and putting a stop payment on the check.
  3. Personal Finance

    Top 5 Reasons Banks Won't Cash Your Check

    Learn the top reasons that a bank won't cash your check, and find out what steps you can take to prevent those scenarios from happening.
  4. Tech

    5 Useless Financial Products That Will Disappear Soon

    Bank deposit slip: what's that? Everyday tools of our financial life that went from indispensable to obsolete.
  5. Small Business

    The Best Banking Services for Your Business

    Find out which banking services can offer a small business the best opportunities for reducing cost and fraud while managing its cash flow more efficiently.
  6. Investing

    What is a Cashier’s Check?

    A cashier’s check is a check written on a financial institution’s funds.
  7. Investing

    A Guide to Bank Accounts

    Find out which type of bank account suits your specific needs.
  8. Personal Finance

    What is a Bounced Check?

    Bounced check is a slang term to describe a check that cannot be processed because its writer has insufficient funds.
  9. Investing

    Introduction To Commercial Paper

    Commercial paper is a short-term instrument that can be a viable alternative for retail fixed-income investors looking for a better rate of return on their money.
RELATED FAQS
  1. How long does it take a check to clear?

    It usually takes two days for a check to clear, but in some cases it may take longer. Discover how banks treat large deposits ... Read Answer >>
  2. What other sectors are most similar to electronics?

    Find out which segments of the economy are similar to the electronics sector and how innovation and technology impact the ... Read Answer >>
  3. How do you calculate payback period using Excel?

    Understand the various fees that can be assessed on a personal or business checking account, and learn methods to avoid being ... Read Answer >>
  4. How much of the global economy is comprised of the electronics sector?

    Find out how much of the global economy is comprised of the electronics sector. Learn which regions are responsible for the ... Read Answer >>
  5. What percentage of an electronics company's spending is typically spent on research ...

    Examine the electronics sector and learn what percentage of an electronics company's spending is usually allocated to research ... Read Answer >>
Trading Center