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. Electronic Check Presentment - ...

    A process that allows financial institutions to exchange digital ...
  3. Check

    A written, dated and signed instrument that contains an unconditional ...
  4. Check Clearing For The 21st Century ...

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

    A check that has cleared the depositor's account and has been ...
  6. Crossed Check

    Any check that is crossed with two parallel lines, either across ...
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

    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.
  3. Managing Wealth

    2015's Top Checking Account Promotions

    Open a checking account in 2015 and the bank could give you a cash bonus. Check out these top offers.
  4. Investing

    What is a Cashier’s Check?

    A cashier’s check is a check written on a financial institution’s funds.
  5. 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.
  6. 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.
  7. 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.
  8. Managing Wealth

    Top Premium Checking Accounts of 2015

    Which banks offer the best deals for premium checking accounts – and what do you have to do to qualify for one?
  9. Personal Finance

    10 Checking Accounts the Ultra Rich Use

    These accounts – created specifically for the wealthy – come with special extras such as personal bankers, waived fees and the option of placing trades.
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. When do checks expire?

    There is a legal grace period for cashing checks, but depositors and issuers may risk overdraft fees if a late check is presented ... Read Answer >>
  3. What is the difference between investment banks and merchant banks?

    Merchant banks and investment banks, in their purest forms, are different kinds of financial institutions that perform different ... Read Answer >>
  4. Should I convert my telecom paper stocks to electronic records?

    Convert your paper shares of a telecommunications company's stock to electronic form in just a few simple steps, and make ... Read Answer >>
  5. 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 >>
Trading Center