What are Remotely Created Checks (RCC)?

Remotely created checks, sometimes called RCCs, are orders of payment that a payee issues via telephone, email, or online account.

An RCC does not bear the customers' signatures like regular checks; instead, they are "Authorized by Drawer," meaning that they don't require signatures for authorization.

This blog post will explore the benefits of remotely created checks, how they can simplify your transactions, and how eCheck verification can help protect your business from fraud.

What is a Remotely Created Check?

A remotely created check is an electronic check authorized by the customer. RCCs are sometimes called eChecks, demand drafts, or telechecks. Remotely created check, also known as a "preauthorized draft," are created and authorized without the physical presence of the check.

Instead, the account holder authorizes the creation of the check remotely, such as through an online bank portal or over the phone, and the check is then printed and sent to the payee. Remotely created checks are typically used for one-time or recurring payments, such as rent or mortgage payments, insurance premiums, or utility bills.

Unlike traditional checks, remotely created checks do not require a physical signature, as the authorization process serves as the equivalent of a signature. The checks also do not have the same level of legal protection as traditional checks, as they can be more difficult to verify and track in the event of fraud or disputes. Therefore, it's important for account holders to carefully review their bank statements and report any unauthorized remotely created checks to their bank or financial institution as soon as possible.

The process for sending eChecks remotely is as follows:

• Customers authorize businesses to generate remotely created checks by providing the required information, including the MICR code from a valid check and a bank routing number.
• Once the customer authorizes the business to create a remotely created check, the business can generate an electronic check and submit it for payment.
• The customer’s bank processes the payment and deducts the funds from the customer’s account, the same as they would with a traditional written and signed check.

RCCs offer several advantages for businesses and customers alike. In addition to being a convenient way to collect payments, the check is also a faster way to get paid. With RCCs, you don't have to wait for a physical check to arrive in the mail or for a bank deposit to go through to receive your cash.

RCCs also eliminate the risk of lost or stolen checks. Finally, since they don't require customer signatures, they reduce the risk of forged checks.

Are Remotely Created Checks the Same As Electronic Checks?

While remotely created checks (RCCs) and electronic checks share some similarities, they are fundamentally different types of financial services.

An electronic check, also known as an eCheck, is a digital version of a traditional paper check. It contains the same information as a paper check, including the account holder's name, bank account number, routing number, and payment amount, but it is transmitted electronically between banks using the Automated Clearing House (ACH) network. To use an electronic check, the account holder typically provides the necessary information to the payee, who then initiates the order.

On the other hand, a remotely created check is created and authorized by the account holder, usually remotely, without the need for a physical check or a physical signature. RCCs can be initiated by a third party, such as a biller or service provider, with the account holder's authorization, and are often used for recurring payments, such as a home mortgage payment. Unlike electronic checks, RCCs do not require the account holder to provide their bank account information to the payee.

Another key difference is the level of legal protection afforded the payment systems. Electronic checks are protected under the Electronic Fund Transfer Act and the Uniform Commercial Code, which provide consumers with certain rights in the event of unauthorized transactions or errors. However, RCCs are not subject to the same level of legal protection, and consumers may face greater difficulty disputing fraudulent or unauthorized transactions.

How Are ACH and RCC Transactions Different?

The main difference between an ACH transaction and a remotely created check (RCC) is the way they are authorized and initiated.

An ACH transaction is an electronic payment that is initiated by the account holder or a third-party with the account holder's authorization. The transaction is processed through the Automated Clearing House (ACH) network, which is a secure electronic payment system used by financial institutions in the United States. ACH transactions are typically used for direct deposit of payroll, Social Security benefits, and tax refunds, as well as for bill payments and other recurring payments.

A remotely created check, on the other hand, is a type of check that is created and authorized by the account holder without the physical presence of the bank check. The account holder authorizes the creation of the check remotely, such as through an online banking portal or over the phone, and the check is then printed and sent to the payee. RCCs are typically used for one-time or recurring payments, such as rent or home mortgage payments, insurance premiums, or utility bills.

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3 Ways RCCs Help Your Business

Here are the top advantages of using remotely created checks to collect payments from your customers:

1. Convenience: A remotely created check is a convenient way to collect payments - without waiting for a physical check. This is a big deal if you have customers who live far away or make last-minute payments. You can also use an RCC to set up recurring payments. This allows you to automatically bill your customers without having to send invoices or reminders.
2. Security: Remotely created checks eliminate the risk of lost or stolen checks. Additionally, RCC verification secures your payments by verifying the customer’s bank account and routing number before payment. This can give you peace of mind, since you know your check payments are secure and your business is safe from fraud.
3. Speed: RCCs process quickly, which means you receive your payments faster. No more waiting weeks for payments or wondering when you'll get a check in the mail.

Remotely created checks offer many advantages for businesses, but it’s also important to understand their potential risks. Criminals can use an RCC to commit check fraud, and the law can hold companies liable if they do not take steps to verify the customer’s identity and bank account information.

Fortunately, there's an easy way to navigate the risks associated with a remotely created check. For example, eCheck verification can help protect your business from fraud by verifying the customer’s bank account and routing number. By taking these precautions, you can ensure your payment processing is secure and your institution is safe.

Our ACH Alternative, Remotely Created Checks

Remotely created checks, or RCC, are a great solution for high risk merchants as an alternative payment option when traditional payment methods are not available or feasible. High risk merchants are those who are considered to be at a higher risk of chargebacks or fraud due to the nature of their business, services, or industry.

Order and Return Flexibility

We understand check returns are relative to your industry type. Therefore, we create thresholds that work in favor of your business.

Bank Account Health

Fully eliminate check returns. Ensuring healthy bank relationships and reliable bank deposits

Re-Bill Customization

Re-Bill Customers (up to 3x) if the first bank payment is unsuccessful.

Account Verification

Instantly verify your recipient’s account and balance for a seamless & secure payment experience.

Real-Time Reporting

Our robust digital portal allows for you to easily reconcile and streamline reporting & accounting when using remotely created payments.

Simple API

Intuitive, attractive UX that you can easily integrate with your company’s platform and accounts.

Industries Served

Our bank relationships allow us to serve low & high risk businesses alike. If your business struggles to find a way to accept credit cards or set up MIDs that accompany your volume, SeamlessRCC will be able to help and provide you with additional information.

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Want to Start Using Remotely Created Checks for your accounts? SeamlessChex is Here for you!

Trust SeamlessChex for your remotely created checks. Because RCCs verify the funds in a payment account, you can rest assured knowing your payment will clear.

Ready to get started? Remotely created checks from Seamless Chex are easy to set up and use. We’ll provide you with everything you need to start accepting RCCs, including a free payment gateway and virtual terminal.

And our team of experts is always available to answer any questions you may have.

Contact a Seamless Chex representative today to start using RCCs in your business!