check or tick (American English; see spelling difference) is a document that instructs the bank to pay a certain amount of money from one's account to the person whose check has been issued. People who write checks, known as drawers , have transaction banking accounts (often called current, check, checking, or gyro account) where their money is kept. The drawer writes various details including the amount of money, the date, and the payee on the check, and signs it, ordering their bank, known as drawee , to pay the person or company the amount of money mentioned.
Checks are a kind of bill of exchange and developed as a way to make payments without the need to carry large amounts of money. Paper money evolved from promissory notes, other forms of negotiable instruments that are similar to checks because they are basically written orders to pay the amount given to anyone who has it (the "carrier").
Checks are negotiable instruments that instruct a financial institution to pay a specified amount of a particular currency from a particular transaction account that is stored in the drawer's name with the agency. Both the drawer and the payee may be a natural person or a legal entity. Checks are order instruments , and are not generally paid only to the carrier as a carrier instrument, but must be paid to the payee. In some countries, such as the US, payees can support the checks, which allows them to specify a third party to pay.
Although these forms of examination have been in use since ancient times and since at least the 9th century, during the 20th century examinations became a very popular non-cash method for making payments and the use of checks peaked. In the second half of the 20th century, when the checking process became automatic, billions of checks were issued each year; these volumes culminated in or around the early 1990s. Since then the usage check has dropped, partly replaced by the electronic payment system. In increasing the number of state checks has become a marginal payment system or has been completely removed.
Video Cheque
Spelling and etymology
Spellings check , checque , and check are used interchangeably from the 17th century to the 20th century. However, since the 19th century, spelling tick (from French chÃÆ'¨que ) has become the standard for financial instruments in Commonwealth and Ireland, while check i> is only used for other meanings, thus distinguishing two definitions in writing.
In American English, the common spelling for both is check .
The Etimological Dictionary connects the financial meanings derived from "examination of counterfeiting", using "checks" to mean "control" derived from checks of chess, a term that goes into English through French, Latin, Arabic and finally from Persian word " shah "or" king ".
Maps Cheque
History
The check comes from the old banking system, where bankers will issue an order at their customer's request, to pay money to the identified payee. Such an order is referred to as the bill of exchange . The use of exchange bills facilitates trade by eliminating the need for traders to carry large amounts of currency (eg, gold) to buy goods and services.
Initial years
The ancient Romans were believed to have used an early form of examination known as pre-descriptions in the 1st century BC.
Muslim traders are known to have used checks or? akk system since the time of Harun al-Rashid (9th century) of the Abbasid Caliphate. Carrying paper sakk is safer than transporting money. In the 9th century, a trader in country A could cash the saqq withdrawn at his bank in country B.
In the 13th century in Venice, bill of bills were developed as a legal tool to enable international trade without the need to bring in large quantities of gold and silver. Their use then spread to other European countries.
In the early 1500s in the Republic of the Netherlands, to protect the accumulation of large cash, people began to deposit their money with "cashier". These cashiers hold money for a fee. Competition encourages cashiers to offer additional services including paying money to anyone who carries written orders from depositors to do so. They keep the records as proof of payment. This concept then spread to the UK and elsewhere.
Modern era
In the 17th century, exchange bills were used for domestic payments in the UK. Checks, a kind of bill of exchange, then start growing. Initially they are called retrieved notes , because they allow the customer to withdraw funds he has in his account with the bank and require immediate payments. This is handwritten, and one of the earliest known is still there taken from Messrs Morris and Clayton, scriveners and bankers based in the City of London, and dated 16 February 1659.
In 1717, the Bank of England pioneered the first use of pre-printed forms. These forms are printed on "check paper" to prevent fraud, and the customer must attend personally and get the numbered form from the cashier. Once written, the check is brought back to the bank for completion. The suppression of paper money in Britain in the 18th century further encouraged the use of checks.
Until about 1770, unofficial check exchanges took place among London banks. The clerk of each bank visits all other banks to redeem checks, while keeping a balance count among them until they are satisfied with each other. Daily clearing checks started around 1770 when bank employees met at Five Bells, a tavern on Lombard Street in the City of London, to exchange their checks in one place and settle the balance in cash. This is the first banker's clearing house.
In America, the Bank of New York, once founded by Alexander Hamilton in 1784, began issuing checks. The oldest surviving example of a complete American checkbook from the 1790s was discovered by a family in New Jersey.
It is thought that the Scottish Commercial Bank was the first bank to personalize its customer checks, in 1811, by printing the account holder's name vertically along the left bank. In 1830 the Bank of England introduced books containing 50, 100, and 200 forms and integers, bound or stitched. This checkbook becomes a common format for check distribution to bank customers.
At the end of the 19th century, some countries formulated a law on examination. Britain passed the Bills of Exchange Act in 1882, and India passed the Negotiable Instruments Act (NI Act) 1881; both of which include examination.
In 1931 efforts were made to simplify the use of international examinations by the Geneva Conventions on the Unification of Laws Relating to Checks. Many countries of Europe and South America and Japan joined the convention. However, countries including the US and British Commonwealth members do not participate so it remains very difficult to check for cross-border use.
In 1959 the standard for machine-readable characters (MICR) was agreed and patented in the US for use with inspection. This opens the way for the first automatic read/sorter engine to clear the check. As automation increases, subsequent years see dramatic changes in the way checks are handled and processed. The volume check continues to grow; at the end of the 20th century, checks were the most popular non-cash method to make payments, with billions of them processed each year. Most countries saw check volumes in the late 1980s or early 1990s, after which electronic payment methods became more popular and use of checks declined.
In 1969 check warrant cards were introduced in several countries, allowing retailers to confirm that checks will be honored when used at the point of sale. The drawer will sign a check in front of the retailer, who will compare the signature with the signature on the card and then write the security check-card number on the back of the check. Such cards are generally removed and replaced with debit cards, beginning in the mid-1990s.
From the mid-1990s, many countries enacted legislation to allow for checks cuts, in which physical examinations were converted into electronic forms for transmission to bank payments or home-clearing. This eliminates complex physical presentations and saves processing time and costs.
In 2002, the Eurocheque system was removed and replaced by a domestic clearing system. Old Eurocheques can still be used, but are now processed by a national clearing system. At that time, a number of countries took the opportunity to stop using checks altogether. In 2010, many countries have stopped using checks altogether or signaled that they will do so in the future.
Parts of check
The four main items on the check are
- Drawer , the person or entity that created the check
- Payment recipient , beneficiary
- Puller , bank or other financial institution where checks may be issued for payment
- Amount , amount of currency
As the use of checks increased during the 19th and 20th centuries, additional items were added to improve security or to facilitate the processing of banks or financial institutions. A signature from a drawer is required to authorize a check and this is the primary way to authenticate checks. Secondly, it becomes customary to write sums in words as well as numbers to avoid mistakes and make it more difficult to deceive changing amounts after a check has been written. It is not a legal requirement to write the amount in words, although some banks will refuse to accept checks that have no amounts either in numbers or words.
The date of issue has been added, and the check may be invalid within a certain time period after it is issued. In the U.S. and Canada, checks are usually valid for six months after the date of publication, after which are date-out, but this depends on where the check is withdrawn; in Australia this is usually fifteen months. A check that has a future issue date, checking after the date, may not be able to be presented until such date elapsed, writing check post dates may be ignored or illegal in some countries. Instead, antedated checks have a publishing date in the past.
Check numbers are added and check the book issued so that the check numbers are in order. This allows for some basic fraud detection by the bank and ensures one check is not presented twice.
In some countries such as the US, checks contain scraps that the purpose of the examination can be demonstrated as a convenience without affecting the official part of the check. In the UK this is not available and such records are sometimes written on the back side of the check.
In the US, at the top (when examined vertically oriented) from the reverse side of the check, there is usually one or more blank lines labeled something like "Endorse here".
Starting in the 1960s a readable routing engine and account information was added to the bottom of the check in MICR format. This allows automatic sorting and routing inter bank checkups and leads to an automatic clearing center facility. The information provided at the bottom of the check is country specific and is encouraged by the check clearing system of each country. This means that the payee no longer has to go to the bank issuing the check, otherwise they can deposit it in their own bank or other bank and the check will be transferred back to the original bank and the funds transferred to their own bank account..
In the US, the bottom 5/8 "of the check is the distant zone reserved for MICR characters alone which should not be disturbed by handwriting.We should be careful of lowercase descendants when filling in signatures and frequent memo lines at the bottom of the check in close proximity It is advisable to treat signatures and memo lines as borders rather than baselines and marks above them.Intrusion to the MICR area can cause problems when a check runs through the clearinghouse, requiring someone to print a check strip of MICR check and glue it to check Many ATMs the new does not use a deposit envelope and actually scans the checks at the time it is stored and will refuse the check because the handwritten handwriting that interferes with reading the MICR causes considerable inconvenience because the depositor may have to wait for days for the bank to open and may have trouble getting to to the bank even when they are open; this may delay the availability of y from the section deposits that their bank provides immediately as well as the balance of the deposit. Terms of service for many mobile phone deposits (camera phone) also require MICR parts to be read. Not all MICR characters have been printed when you fill the check manually because additional characters will be printed later to encode the number; so your careless signature can obscure characters that you do not realize will be printed there. Since MICR characters are no longer printed with magnetic ink and will be scanned with optics rather than magnetic means, the reader will not be able to distinguish pen ink from pre-printed magnetic inks; this change allows checks to be printed on ordinary home and office printers without requiring pre-printed check forms, enabling the taking of ATM deposits, enabling movable deposits, and facilitating electronic check copies.
For additional protection, checks may be crossed, limiting the use of checks so that funds must be paid into bank accounts. Formats and words vary from one country to another, but generally two parallel lines can be placed vertically across the check or in the upper left corner. In addition the words 'or carrier' should not be used, or if the pre-printed checks must be crossed out on the payer's line. If a check is crossed with the words 'Account Payee' or similar, then the check can only be paid to the bank account of the person originally referred to as the payee, so it can not be backed up to a different payee.
Attached document
Checks sometimes include additional documents. The pages in the checkbook can consist of both the check itself and the stub or counterfoil - when the check is written, only the check itself is detached, and the stub is stored in a checkbook as a check record. Or, checks can be recorded with carbon paper behind each check, on a ledger between check or behind a checkbook, or in a completely separate list of transactions equipped with a checkbook.
When a check is sent, a separate letter or "shipping suggestion" can be attached to inform the recipient of the objective of the check - formally, which receivables to credit the funds to. This is often done formally using the slip provided when paying bills, or informally by mail when sending an ad hoc check.
Usage
The parties who perform routine checks generally include a drawer , the depositors write checks; a drawee, a financial institution where a check may be filed for payment; and a payee, entity to whom the drawer issued a check. Drawer draft or interesting check marks, also called cutting checks , especially in the US. There may also be beneficiaries - for example, in depositing checks with broker account guards, the payee will be a guardian, but checks may be marked "F/B/O" ("for benefit") of beneficiaries.
In the end, there is also at least one endorsee usually a financial institution that serves the payee's account, or in some circumstances a third party may be to whom the payee is indebted or wants to give you money.
A payee receiving a check will usually keep it in the account at the payee's bank, and ask the bank to process the check. In some cases, the payee will take a check to the drawee bank branch, and cash the check there. If a check is rejected in a drawee bank (or a drawee bank returns a check to a bank that has been deposited) because there is not enough funds for the check to be removed, it is said that the check has been rejected . Once the check is approved and all the corresponding accounts have been credited, the checks are stamped with some sort of cancellation mark, such as a "paid" stamp. The check now is cancel check . The canceled check is placed in the account holder file. The account holder may request a copy of the canceled check as proof of payment. This is known as the check clearing cycle.
Checks may be lost or lost in the cycle, or delayed if further verification is required in the case of fraudulent allegations. As such, checks may bounce off momentarily after being saved.
Following concerns about the amount of time the Credit Check and Credit Clearing Company required to clear the checks, the Royal Fair Trade Office established a working group in 2006 to look at the check clearing cycle. Their report says that clearing time can be increased, but the costs associated with accelerating the check clearing cycle can not be justified given the use of a declining check. However, they conclude the biggest problem is the unlimited time that banks can take to defraud checks. To overcome this, the changes are implemented so that the maximum time after check is deposited that it can be rejected six days, known as the "fate certainty" principle.
The advantage for drawers using checks rather than debit card transactions, is they know the drawer bank will not spend money until a few days later. Paying by check and making a deposit before clearing the drawer bank is called "kiting" or "floating" and is generally illegal in the US, but rarely enforced unless the drawer uses multiple accounts with multiple institutions to increase delays or steal funds.
Decrease usage
Checking usage has been declining for several years, both for point of sale transactions (which credit cards and debit cards are favored) and for third party payments (for example, bill payments), where declines have been accelerated by the emergence of telephone banking and online banking. Because of paper-based, expensive checks for banks to process are compared with electronic payments, so banks in many countries now do not recommend the use of checks, either by charging checks or by making the alternatives more attractive to customers. Especially handling money transfers requires more effort and time consuming. Checks must be submitted in person or sent by mail. The emergence of an automated teller machine (ATM) means that a small amount of cash is often easily accessible, so sometimes there is no need to write a check for that amount.
Alternative to check
Alternative payment systems include:
- Cash
- Debit card payment
- Credit card payment
- Direct debit (initiated by payee)
- Direct credit (initiated by payers), ACH in the US, current accounts in Europe, Direct Entries in Australia
- Wire transfer (local and international) such as Western Union and MoneyGram
- Electronic bill payment using internet banking
- Online payment services, e.g. PayPal, Integrated Payment Interface, PhonePe, Paytm, and Worldpay
- Money orders
Europe
In most European countries, checks are now rarely used, even for third-party payments. In these countries, it is standard practice for businesses to publish their bank details on invoices, to facilitate the receipt of payments with demand deposits. Even before the introduction of online banking, it is possible in some countries to make payments to third parties using ATMs, which can accurately and quickly capture the amount of invoices, due dates and bank details of payees through barcode readers to reduce lockouts. In some countries, entering a bank account number causes the bank to disclose the payee name as additional protection against fraud. In using checks, the responsibility is on the payee to initiate a payment, whereas with a giro transfer, the responsibility is on the payer to influence the payment (The paper check writer pushes the rope: he can not force money out of his or her own account and into the destination account. writing a paper check, he handed the end of the rope to the receiver, which will draw his own time.In contrast, demand deposits are more similar to wire transfers, in which the payer pushes his money toward the payee). The process is also procedurally simpler, since no checks are posted, can claim to have been posted, or require banking or permission.
In Germany, Austria, the Netherlands, Belgium and Scandinavia, the checks are almost completely gone for direct bank transfers and electronic payments. Direct bank transfers, using giro transfers, have become standard procedures since 1950 to send and receive routine payments such as rent and wages and even mail-order invoices. In the Netherlands, Austria, and Germany, all types of invoices are usually accompanied by so-called acceptgiros (Dutch) or ÃÆ'Ã… "berweisungstrÃÆ'¤ger (German), which is basically a standardized form a pre-paid bank transfer order with the payee's account details and the amount to be paid. The payer fills out his account details and submits the form to the officer at his bank, who will then transfer the money. It is also very common to allow payees to automatically withdraw the requested amount from the payer's account ( Lastschrifteinzug (Germany) or Incasso (machtiging) (The Netherlands). Although similar to pay by check, the payee only needs the paying bank and account number. Since the early 1990s, this method of payment has also been available to merchants. Because of this, credit cards are somewhat rare in Germany, Austria and the Netherlands, and are mostly used to provide access to credit rather than as a payment mechanism. However, debit cards are widespread in these countries, as almost all banks in Austria, Germany, and the Netherlands issue debit cards, not simple ATM cards for use on current accounts. Acceptance checks have declined since the late 1990s, due to the removal of the Eurocheque. Diluting a foreign bank check is possible, but it is usually very expensive.
In Finland, banks stopped issuing private checks around 1993 to support the demand deposit system, which is now almost exclusively run electronically either via internet banking or payment machines located in banks and shopping centers. All Nordic countries have used interrelated international giro systems since the 1950s, and in Sweden, the examinations are now almost completely abandoned; in Denmark, all banks stop receiving checks from 1 January 2017. Debit cards are now preferred for direct store payments when not using cash. For large store payments, such as car purchases, similar checks, money orders (Sweden: postvÃÆ'¤xel) are still in use.
In Poland, checks were withdrawn from use in 2006, primarily due to a lack of popularity due to widespread adoption of credit and debit cards. Electronic payments in the EU are now fast and cheap - usually free for consumers.
In the UK, Ireland and France, checks are still popular, partly because checks remain free for private customers; However, interbank transfers are increasingly popular. Since 2001, businesses in the UK have made more electronic payments than check payments. Automatic payments increased from 753 million in 1995 to 1.1 billion in 2001 and checks decreased within the same time period from 1.14 to 1.1 billion payments. Most utilities in the United Kingdom charge lower prices to customers who pay by direct debit than other payment methods, including electronic methods. Most retailers in the UK and many in France have not received a check as a means of payment for several years, and check that the guarantee card is no longer issued. For example, Shell announced in September 2005 that he would no longer accept checks at his UK gas station. This was soon followed by other major fuel retailers, such as Texaco, BP, and Total. Asda announced in April 2006 that he would stop receiving checks, initially as an experiment in the London area, and Boots announced in September 2006 that he would stop receiving checks, initially as an experiment in Sussex and Surrey. Currys (and other stores in the DSGi group) and WH Smith also no longer accepts checks. Checks are now widely predicted to be a thing of the past, or at most, niche products used to pay private individuals or to a large number of small service providers who are unwilling to provide their bank details to customers to allow electronic payments made for them or do not want to be encumbered by checking their bank accounts frequently and reconciling them with the amount to be paid (for example, music teachers, driving instructors, children's sporting lessons, small shops, schools). The UK Paying Board announced in December 2009 that the checks will be removed in October 2018, but only if an adequate alternative is developed. They intend to conduct an annual review of the progress of other payment systems and final review of the decision will be held in 2016. However, concerns expressed by charities and parents, who are still heavy check users, and replacement plans are criticized for being open to fraud. It was therefore announced by the UK Paying Board in July 2011 that the checks will not be deleted. 432 million inter bank checks and credit items worth £ 472 billion were processed in the UK by 2016 under British Payments. By 2017, 405 million checks worth  £ 356 billion are used for payments and cash, averaging 1.2 million checks per day, with more than 10 million confirmed in Northern Ireland alone. The Credit Check and Clearing Company noted that checks continue to be highly valued to pay traders and electric bills, and play an important role in businesses, clubs and the public sector, with nine out of 10 businesses saying they receive or make payments by check on a monthly basis.
In June 2014, after a successful trials in Britain by Barclays, the British government gave the go-ahead for a photo inspection plan that allowed people to pay in checks by taking the photo, rather than physically depositing bank checks on the bank. North America (Canada and the United States)