Capturing in-person checks

Remote Deposit Capture (RDC) is a service that allows you to convert paper checks into electronic payments without physically depositing them at a bank. This guide explains the key concepts, requirements, and best practices for implementing RDC.

RDC is the process of:

1. Capturing images of paper checks
2. Extracting check information using OCR (Optical Character Recognition)
3. Converting the checks into electronic payments
4. Processing these payments through the ACH (Automated Clearing House) network

When you capture a check image, you typically take a photo of the front and back of the check using a mobile device or scanner. The images are then sent to a payment processor for verification and conversion.

Back Office Conversion (BOC)

In Payabli, when you capture a check image using RDC, that’s the first step in converting it into an electronic payment. This process is called Back Office Conversion (BOC). BOC allows businesses to convert checks received at a point-of-sale or staffed payment location into electronic payments. Only some checks are eligible for BOC processing, and the process must comply with specific rules and regulations.

Eligible checks:

• Consumer checks only (no business, insurance, or government checks)
• Checks received in-person at point-of-sale for goods or services
• Checks from staffed bill payment locations
• Checks with proper MICR line data

Ineligible checks:

• Checks that weren’t received in-person (for example, mailed checks)
• Checks from un-staffed payment locations (for example, drop boxes)
• Checks where the consumer has opted out of electronic conversion

Check image requirements

For successful RDC processing, check images must meet these standards:

• Format: Image must be in JPEG or PNG format.
• Size: File size should be less than 1MB per image.
• Quality: The entire check must be visible, clear, and legible.
• Positioning: No partial, blurry, or illegible images.
• Lighting: Good lighting conditions that help create a clear image.
• ** Magnetic Ink Character Recognition (MICR) line**: The bottom line containing routing and account numbers must be clearly visible. The MICR line at the bottom of a check contains:
  • Routing number (⑆123456789⑆)
  • Account number (⑈123456⑈)
  • Check number (0123)
• CAR and LAR values: The check image must have clear and legible CAR (Courtesy Amount Recognition) and LAR (Legal Amount Recognition) values. The CAR is the numerical amount, while the LAR is the written amount. They system verifies the two amounts match.

When implementing RDC, you must comply with the following requirements:

1. Customer notice: Tell the customers that checks may be converted to electronic payments
2. Check retention: Retain the original check for a minimum period (typically 14 days)
3. Secure destruction: Securely destroy converted checks after the retention period
4. No double presentment: Never process both the paper check and the electronic version
5. Privacy protection: Safeguard all customer banking information
6. Opt-out mechanism: Give the customers a way to opt out of check conversion

Next steps

If you’re interested in using RDC, contact the Payabli team to enable it. You can use the API to integrate Payabli’s RDC features into your app. See the RDC developer guide for more information.