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#20452 - 06/11/02 09:53 PM P-O-S questions
Chiquita Banana Offline
Diamond Poster
Chiquita Banana
Joined: Jun 2002
Posts: 1,044
The banana bin
It's a hot topic right now for our merchant customers.
A competing bank in the area has solicited to merchants of the product that allows them to take a check and convert it to a POS transaction. The competing bank sold it as the end all beat all because our merchants would not experience check returns for NSF or account closed because funds would be able to be verified on the spot.
But my cynical mind is always running, 24 hours a day, 7 days a week.
What happens if the check is lost/stolen and used fraudulently? Does this now fall under Reg E or Reg CC? I would never be able to see the original check as it is given back to the customer...which makes me think that it would be Reg E.
Help!!! This is a new area for me.
My opinions are definately my own. I could be wrong. But I don't think so.

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Operations Compliance
#20453 - 06/12/02 01:12 PM Re: P-O-S questions
PABanker Offline
Gold Star
Joined: Dec 2000
Posts: 491
Blue Ball, PA 17506
Good article in the June ABA Compliance magazine that may be helpful to you. If you need a copy, please send your fax number and I will gladly fax it to you.

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#20454 - 06/12/02 02:26 PM Re: P-O-S questions
prj Offline
100 Club
Joined: Oct 2001
Posts: 100
Chaska, MN
This sounds interesting.

There may be some confusion between POS transactions (typically used via a check-card, where the VISA network is the processor that actually verifies funds and authorizes a transaction) and POP transactions (The Point of Purchase ACH transaction, where the MICR data is read from the check, the check is returned to the customer, and an ACH transaction is created - however at no time are funds "verified", eliminating NSF or Closed Account items). You may want to search "Electronic Checks" in the THREADS section - there has been a lot of discussion about them.

Once a check is converted to an electronic transaction, it is covered by Reg E. Because this is now an ACH transaction, there is the 60-day return period for unauthorized transactions, using the ACH Affidavit of Unauthorized / Improper Entry. So, this is actually a little safer for banks.

Pam The comments above are my own thoughts an opinions, not those of my employer.

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