Posted by NationalACH on Dec 13, 2013
Remotely Created Checks

What is RCC?

Remotely created checks (RCC) are an outgrowth of Check 21 legislation. 

Check 21 was originally implemented to allow paper checks to be cleared through the Federal Reserve via bank-to-bank image transfer. Most Check 21 transactions start as paper checks from which electronic images are created. 

However, there are no paper checks associated with RCC. Instead, remotely created checks use the account information and authorization from the account holder to create an electronic image of a check.  The RCC file sent for clearing through the Federal Reserve is indistinguishable from a file of paper checks which have been remotely converted to electronic items.

RCC has many legitimate commercial uses.  For instance, bill payment systems, credit card companies, utilities, insurance agencies, collection firms and mutual funds often use RCC to establish payment plans.

 Difference between a Bank Drafts and RCC

Merchants often confuse the creation of a RCC with a “bank draft”. 

A bank draft uses software to create a paper check.  The drafts can be created either by merchants.  Or by third party processors.

There are several problems associated with bank drafts. Many large banks are now refusing to honor bank drafts that are not signed by the account owner.  The checks are returned to the merchant without having been processed.  As a result, the merchant does not receive his money.

Additionally, most business banks do not like high returns on checks processed through a commercial account.  If returns are greater than the norm, a merchant often discover the bank is terminating their commercial accounts.

For this reason, high risk merchants work with electronic check processors who create substitute checks in the acceptable format for clearing through the Federal Reserve in an electronic format.  Cleared funds are then deposited to your business bank account.  Which safeguards your business bank accounts.   


RCC is a good solution for high risk merchants who want to accept electronic check payments from customers. 

 NACHA, the governing body of the ACH network limits chargebacks to 0.5% and returns to 15%.  Most high risk merchants cannot qualify for ACH processing.  

RCC is governed by the check law and the Uniform Commercial Code rather than the ACH network. Giving high risk merchants far greater flexibility for higher chargebacks and returns than ACH processing

Are you a high risk merchant that wants to accept checks online to increase sales & profits?

Contact today