We’ve had a lot of people ask us about Check 21 (officially known as The Check Clearing for the 21st Century Act). What is it? Is it secure? Do I still have to print with MICR toner? Will PrintBoss help me manage this confusing legislation while printing my QuickBooks checks?
So what is Check 21? Check 21 is a federal law designed to enable banks to handle check payments electronically. The idea behind the law is to make check processing faster and more efficient. Before Check 21 was enacted in 2004, the bank where a check was deposited had to physically transfer the check or checks to the bank that would pay them. Now with the Check 21 legislation, banks can take a picture of the front and back of a check and send it, along with the associated payment information, electronically to the bank that will pay it. If either bank requires a physical copy of the check, a “substitute check” can be printed from the pictures taken. This saves the banks and us the expense of transporting the checks between banks, as well as the associated time. This also allows for you to receive back your check with your bank statements. Check 21 stipulates that any agreement between a bank and its client must continue to be upheld. By law, banks can return either a substitute check or the original check to you, but this is typically agreed upon between you and your bank which will be returned.
What about security? Electronic payment transfer has been around a lot longer than Check 21 has. All payment information sent between banks is processed via secure technology that has been tested and proven secure. Print your QuickBooks checks with no fear.
Do I still need to use MICR toner? Although few institutions, including banks, still use Magnetic Ink Character Recognition to process checks (desk top MICR readers used by paycheck cashing services are among the remaining dinosaurs), Check 21 still stipulates that magnetic ink is to be used for the MICR line. This is where PrintBoss helps you print QuickBooks checks in accordance with Check 21. PrintBoss will print your MICR line accurately and in accordance with Check 21 (just make sure a MICR toner cartridge is loaded in your printer) onto blank check stock every time with no extra clicks. It can provide positive pay files as well, among a number of other security features. Click here to learn more about PrintBoss and its features.
To visit the official Check 21 Federal Reserve FAQs webpage, click here.