Online Check Cashing

By: Jason Gluckman
Submitted: 2007-01-17 16:17:39
Print this article | Tell a friend | For publisher |

Rating:

 

Advancements in technology have made life a lot easier for each and every one of us. This is true for all aspects of our lives, even in the area of our finances. Cashing checks, for example, is a lot easier nowadays than it was before. Not so long ago, cashing checks meant agonizing long lines in banks, just to discover that your check couldn't be cashed when you reach the teller. Today, cashing checks only requires a few minutes of self-service from interactive check-cashing kiosks.

Innovations in check cashing, however, did not end with check-cashing machines and kiosks. Just when many had already been convinced that these machines were the best inventions in the field of check cashing, the idea of online check cashing was introduced. Does this sound ridiculous and impossible? On some points, it is. Because how can a bank authenticate your check and your identification if you are cashing the check through the Internet? Furthermore, how can you get the cash if your check has been authenticated and processed?

But whether you can visualize the concept behind online check cashing or not, the technology actually exists. In fact, many large companies have long been using the technology. In online check cashing, the checks won't literally be cashed and delivered to you. Instead, the cash value of the check, once verified and processed, will be deposited in your bank account. But the other question is, how can the bank authenticate or verify your check?

Online check cashing requires a special machine and software for any transaction to be made possible. Another requirement is high-speed, 24-hour Internet access. Basically, the machine takes an image of your check on both sides, just as a cash-checking machine would. The bank then stores an electronic copy of the check, called a substitute check, in the database while the actual check is marked electronically, indicating that it has been cashed. Once the check is processed and verified, its cash value is then deposited to your bank account.

As of today, only a few banks are offering online check cashing services to regular customers. The hardware required for online check cashing transactions is also quite expensive. These factors make the technology not advantageous for general use, at least as of today. Major proponents of the technology, however, claim that online check cashing can be advantageous to some, especially to those who consider time of utmost importance.

Article source: Expert Articles