A major problem with check verification/guarantee services is consumer identification.
Some services use plastic cards (i.e., Honest-Face, CASHEX).
Many use drivers’ licenses. Drivers’ licenses are not always effective in large metropolitan areas where significant portions of the population do not drive cars.
Major credit cards (i.e., Visa, MasterCard, American Express).
Three data items are required for check verification/guarantee.
Consumer identification? 16 bytes.
Amount? 8 bytes.
Store identification? 12 bytes.
Check verification services evaluates the transaction and advise the retailer, utilizing a qualitative scale, on accepting the check. The final decision is the retailer’s who bears check losses. Check guarantee services underwrite the transaction, purchasing, without recourse, uncollectable checks.
Check guarantee transaction systems for retail establishments are illustrated in Exhibit 111-13. Check guarantee data networks are separate from, but at times interconnected with, card authorization data networks. INPUT believes that over time the two types of networks will become more closely integrated.
Virtually all check guarantee services utilize the telephone network to some extent.
Telephone for basic service at small establishments.
Voice for “over floor” limits (i.e., $1,500), and exception items for electronic transactions initiated through retail authorization terminals and electronic cash registers.
The data entry operator at the check guarantee center enters the transaction into the host processor.