Electronic Checks

The banking industry is quickly transitioning into the electronic world. The federal government is pushing each state and all financial institutions to turn paper checks into electronic data. No longer will merchants be physically driving to their banks and depositing checks. Instead they will be using back office scanners/imagers, recurring billing software or Internet websites to transmit transactions electronically to banks.

NXGEN has partnered with Jack Henry ProfitStars to be our Electronic Check back-end processor.  Utilizing the ProfitStars web-based solution, you have the ability to set up merchants with either or both credit card (on Elavon) and electronic check processing (on ProfitStars).

Jack Henry ProfitStars processes check services for over
5,900 financial institutions nationally.  They are the nation’s largest and most
successful company in the electronic check banking industry. 

Paper Checks: ACH vs. Check 21
When paper checks are scanned and remotely deposited to the bank, they are required to go by one of two methods:

  1. ACH
  2. Check 21

Both ACH and Check 21 transmit check payments electronically. There are 2 differentiating factors that define whether a check is sent through as a Check 21 or an ACH transaction.

  1. Type of Check
    1. ACH = Consumer Checks Only
    2. Check 21 = Business, Bill Pay, Cashier, Money Order, Travelers, Official, Third Party, Credit Card and Government checks And consumer check writers that have requested to opt out of ACH processing. These checks can be rerouted and sent through as a Check 21 transaction.
  2. Transmittal Method
    1. ACH – Image of the check is captured, but only the MICR line data (Bank Account DDA and Routing Number) is transmitted.
    2. Check 21 – Image of the front and back of the check is captured. The image plus the MICR line data (Bank Account DDA and Routing Number) is transmitted.

Remote Deposit Capture - Accounts Receivable Check Conversion (ARC), Back Office Conversion (BOC) and Check 21

This robust, Web-based image capture, storage and processing solution enables companies to deposit paper checks of all types electronically.  With the passage of the “Check Clearing for the 21st Century Act” (Check 21), paper checks can be cleared electronically through the process of check imaging and image exchange, and/or converted to ACH transactions for collection. Least cost routing and speed of collection are optimized via these solutions.

ProfitStars’ technical infrastructure provides secure check processing. Check 21 allows a company to process any type of check, including corporate checks, consumer checks, cashiers checks, third-party checks and money orders. Duplicate deposit items are prevented. Our Remote Deposit Capture product offers optional courtesy amount recognition (CAR) and legal amount recognition (LAR) in lieu of key entry.

ProfitStars offers value-added services that insure greater accuracy, help streamline the conversion process, help identify errors and reduces risk. We can perform item proofing for deposits.  Any required MICR repair is handled by our staff.  Additionally, we ensure that the files are balanced.

Remit Plus - Accounts Receivable Check Conversion (ARC) and Check 21

ProfitStars offers a thick client, software based remittance processing solution for high volume check and coupon accepting businesses.  This solution accommodates coupons/payment stubs and supports CAR/LAR and OCR at the business site.  Commonly used by utility companies, telecommunications companies and other businesses that process remittance items with payments received via mail or a drop box, Remit Plus processes both ACH (ARC) and Check 21 check conversion.