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. Electronic Check

    A form of payment made via the internet that is designed to perform ...
  3. Check Clearing For The 21st Century ...

    A federal law that took effect on October 28, 2004, and gives ...
  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. Certified Check

    A type of check where the issuing bank guarantees the recipient ...
Related Articles
  1. Savings

    Are Your Bank Deposits Insured?

    Learn how the FDIC is helping to keep your money in your pockets.
  2. Credit & Loans

    The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  3. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  4. Retirement

    I want to roll over a portion of my retirement plan with my employer and I have been advised to ask ...

    This is based on the rules that an individual can roll over a portion of his or her retirement plan balance, rather than rolling over the entire balance. According to the rules, if an individual ...
  5. Budgeting

    How does online banking assist with budgeting?

    Setting up online banking can make a personal budget easier to manage through the use of multiple accounts or expense categories with the same financial institution (for expenses like utility ...
  6. Investing

    What is a blank-check company?

    A blank-check company is a development-stage company that either does not have an established business plan or its business plan is based around a merger or acquisition with another company or ...
  7. Budgeting

    When Good People Write Bad Checks

    Overdraft protection can help when you overestimate your balance, but it will cost you.
  8. Mutual Funds & ETFs

    Why would you keep funds in a money market account and not a savings account?

    Read about the differences between money market accounts and savings accounts, and see why a depositor would elect a money market over a savings account.
  9. Savings

    How Foreign Transaction Fees Work

    Using a credit card when you travel can be costly. Here's what you need to know about foreign transaction fees – plus tips on making purchases abroad.
  10. Savings

    Where To Get A Mortgage If You Have Bad Credit

    Here's where to go if you have a low credit score and still want a mortgage.

You May Also Like

Hot Definitions
  1. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  2. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  3. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  4. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  5. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  6. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
Trading Center