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| frequently asked questions (faq) |
What is Merchant Collect?
A fast, cost effective method of electronically collecting checks returned due to insufficient funds (NSF).
Why should a business use Merchant Collect?
Using Merchant Collect allows a business to electronically represent checks that were returned as NSF. Merchant Collect offers an exceptional collection success rate without requiring the business to be involved in the collection process. This frees the business owner from the time consuming and awkward task of direct collections.
How does Merchant Collect work? Financial Institutions forward returned deposited items (RDI’s) directly to MEA allowing Merchant Collect to start the collection process using the Re-Presented Checks (RCK) feature of the ACH Network. Items are warehoused by Merchant Collect and re-presented to the check writer’s bank for payment. These re-presentments are scheduled to optimize the chance that sufficient funds will be available to cover the amount of the check. If sufficient funds are still not available to cover the amount of the check, a second, and final electronic re-presentment is attempted. When the collection is successfully completed, 100% of the check’s face value will be deposited in the merchant’s account by MEA via ACH.
Will Merchant Collect be more effective than traditional methods of collecting NSF checks? Industry statistics show the rate of recovery on NSF checks through traditional collection methods is 40% to 50%. Strategically timed RCK re-presentments will typically increase the recovery rate to 70%-90% without the expense of traditional collection methods.
Is Merchant Collect an efficient solution for both Financial Institutions and businesses? The entire process of collecting on NSF checks is handled by Merchant Collect. Financial Institutions have only the task of forwarding RDI’s to MEA. Business owners are provided with a fast and cost effective solution to their collection needs. Once collected, the recovered funds are deposited into the merchant’s account within a few days.
What is the cost of using Merchant Collect? Merchant Collect is a free service offered to business. MEA receives the state-regulated NSF collection fee from the check writer for all items that are successfully collected. The business owner will receive 100% of the face value of the check recovered via ACH on a weekly basis. What does the Financial Institution gain from promoting Merchant Collect? A portion of the fees collected by MEA for check recovery are shared with the Financial Institution. The more customers of a Financial Institution that use Merchant Collect the greater the fee income.
How will the business access information on the status of NSF Checks? www.merchantcollect.com provides real-time access for both businesses and Financial Institutions. This website will provide an up to the minute view of every item a business has in the recovery process. Monthly statements will be available via the website, mail, email and fax.
Can all types of checks be recovered by Merchant Collect? No. All RCK re-presentments must be for consumer checks under $2500 that have been written in the previous 180 days.
Will Merchant Collect make a traditional method of collection available when the electronic process is unsuccessful? After exhausting the 2 allowable re-presentment attempts by Merchant Collect the business owner has choices: 1) have the items returned to the business, 2) have the items forwarded to a 3rd party collection agency or 3) contract with MEA’s preferred provider of traditional collection services.
What are the requirements of a business that starts using Merchant Collect? The business must notify customers that NSF items may be collected electronically by posting a sign at the point of sale or on a monthly billing statement. A starter kit will be provided by MEA which will contain materials needed to notify customers.
How and when does MEA provide reimbursement? MEA will credit all recovered funds directly to the business owner’s account via ACH on a weekly schedule.
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