E Commerce Bank Check Drafts

Check drafts are a check written by the person you are paying against your bank account using check information you provide. It is processed by your bank (and the funds transferred into a holding status in thier bank) and reported to you on your bank statement. If you do not object to the charge, the funds are released to the payee and the transaction is complete.

Electronic drafts are not new. Companies have been using them for years. Regulation and implementation costs were reduced in 1996 when new banking laws paved the way for anyone to accept electronic drafts.

The laws that changed are in the Uniform Commercial Code, Title 1, Section 1-201 (39) and Title 3, Section 3-104, and 3-403; Code of Federal Regulations, Title 12, Chapter U, Part 210; and Regulation J., Federal Reserve Bank, Part 2, Sections 4A-201 to 4A-212.

In a nutshell, these laws define a "Negotiable Instrument" which used to required a signature to be binding. With the changes in these laws a signature is no longer required. All that is required is a verbal or written authorization which can be received via phone, fax, email or internet orders.

The special "Bank Code" printed on the bottom of all U.S. checks and ecommerce check drafts uses the MICR font. In that, is found the routing number, bank account number, and other information.

Samples

• Sample1
• Sample2
• Sample3
• Ad hype from ChekFaxx

Service Providers:

• http://techref.massmind.org/techref/checkdraft.asp Pay me money via check draft! (a working demo)

see also:

• Thomson Financial Publishing
• UCC Article 3 (Negotiable Instruments)
• UCC Article 4 (Bank Deposits and Collections)
• Check Fraud: A Guide to Avoiding Losses
• http://www.nelpub.com/domagent/faq.html a nice FAQ.
• http://www.texprint.com/ Blank check stock
• http://www.g7ps.com/scripts/paper.asp Blank check stock.
  

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