Check Conversion

AAA

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.

INVESTOPEDIA EXPLAINS '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. Interbank Network for Electronic ...

    Worldwide network that facilitates the transfer of debit and ...
  2. Bank

    A financial institution licensed as a receiver of deposits. There ...
  3. Certified Check

    A type of check where the issuing bank guarantees the recipient ...
  4. Check

    A written, dated and signed instrument that contains an unconditional ...
  5. Conversion

    The exchange of a convertible type of asset into another type ...
  6. Electronic Check

    A form of payment made via the internet that is designed to perform ...
Related Articles
  1. Are Your Bank Deposits Insured?
    Savings

    Are Your Bank Deposits Insured?

  2. The Evolution Of Banking
    Credit & Loans

    The Evolution Of Banking

  3. Your First Checking Account
    Insurance

    Your First Checking Account

  4. When Good People Write Bad Checks
    Budgeting

    When Good People Write Bad Checks

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center