The End of “Check Float”

eChecks have been increasing in popularity in recent years, with more and more stores simply running your check like a debit card and handing it back as your receipt. But starting tomorrow, stores will have a new way to clear checks electronically, “Back-Office Conversion.” It allows banks to send digital scans of your check rather than the actual check, and it will clear in hours, not days.

This won’t happen over night, but it looks like the days of counting on having a few days before your check clears are over.

I guess the bigger news here is that people still use checks. I assumed the only thing checks were good for these days is the few financial payments that still won’t let you set up a direct debit online.

[via Consumer Law & Policy]

  • RectilinearPropagation

    My online bill payment uses checks instead of debit. Then there’s the whole business of banks avoiding poorer neighborhoods so the only financial institutions there might not offer those kinds of services, at least not for free.

  • mihiker

    And yet, JC Penny still enforces a 7-day hold for returns for tranactions paid by check.
    Of course, I aske my wife just why she paid by check, anyway……….

  • thrillhouse

    Those days of floating checks ended two and a half years ago. Checks are now scanned and electronically sent to your bank from the retailer’s bank and are not air mailed or ‘floated’ to your bank as they used to be. Did you notice that its suddenly no big deal for a bank to offer scans of your checks as an online banking feature? You already have little more time than a debit card transaction. I suppose this new method not only brings the process further up to speed, but also may decrease bounced checks and thus come closer to guaranteeing that stores get their money.

    http://www.msnbc.msn.com/id/5880440
    http://www.communitybankers.org/cmn_tips_floating_check.htm

    caveat emptor, indeed