Technology Sinks the Check Float

The transaction also can show up as an electronic-funds transfer, similar to an ATM withdrawal, says Elliott C. McEntee, president and chief executive of NACHA, formerly the National Automated Clearing House Association.

"This will make it easier for people to reconcile their statement," McEntee says.

You can opt out of having your check electronically converted in a back-office process, he said. In that case, companies will have to specify how you can opt out.

Having your check converted through a BOC has another advantage, McEntee added. Because the transaction is electronically processed, it is covered under the Federal Reserve's Regulation E, which provides extra consumer protection for electronic fund transfers, such as a longer time to report an error. Additionally, McEntee noted that under NACHA rules, if there is an error or unauthorized debit from your bank account, the financial institution has to immediately credit you while an investigation is conducted.

For retailers, there are big savings to be had with back-office conversion, says Danne Buchanan, chief executive of NetDeposit, a Salt Lake City company that provides check-payment technology.

Retailers don't have to take the checks to the bank, and accelerated processing results in fewer bad checks, Buchanan said.

"There are fewer people handling the check, and that lessens the opportunity for loss, fraud and/or confusion in the check clearing process," he said.

Although merchants can begin back-office conversion tomorrow, McEntee pointed out that many may decide to test it before implementing it.

Still, let this be your notice. For the most part, you no longer have a check-clearing cushion. The various ways businesses are clearing checks mean that when you write a check, you'd better have the money in your account.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online athttp://www.npr.org.

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