Remotely Created Check

What are Remotely Created Checks?

At eCheckProcessing, we use Demand Drafts (also called Remotely Created checks) to get your payments processed quickly and securely.  

Demand Drafts came out of the FDIC’s Check 21 legislation.  Check 21 stands for Check Clearing for the 21st Century Act. This is a federal law that is designed to allow banks to handle more checks electronically. It makes check processing  both fast and efficient.  Also called eChecks, these electronic check instruments remove much of the costs of shuffling paper checks from bank to bank and reduce processing time.

A remotely created check is the technical and legal name for demand drafts and electronic check. We prefer calling them eChecks.  These eChecks use the account holder’s account information and authorization to create an electronic image of a check with the required MICR code.  Since the customer authorizes the transaction online or over the phone, the check will not have a handwritten signature like traditional checks.

eChecks flow from the merchant’s bank to the customer’s bank for funding much like physical checks do, but the processing does not require a paper check in the 1st step to be received from the customer.

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