Checks management
For check management, Cross River offers both check writing (withdrawals) and check deposits using MDC (Mobile Deposit Capture is the process of submitting a check electronically using a smartphone). Cross River works with lockbox service providers to process paper check deposits.
By default, all Cross River partners have checks blocked (turned off) for their products. This means a customer can order checks using a third party, and issue a check, but that check will automatically be rejected by Cross River when presented by the Federal Reserve for payment. You can request that CR enable checks per product or even per specific account. If you want to offer checking to your customers on an individual basis, you can keep checks blocked for the product and have CR enable you to have each customer opt in individually, after which you perform a fraud review on the customer.
In Cross River, checks have two different flows:
- Deposit. In the deposit flow, you deposit a check into your CR account. In CR this is referred to as an outbound forward item because the check needs to be sent (out) to the Federal Reserve and presented to the drawee bank (paying bank) for payment.
- Withdrawal. In the withdrawal flow, you write a check on your CR account to pay someone. In CR this is referred to as an inbound forward item because the Federal Reserve sends the check (in) to CR for payment and attempts to clear the check on your account. Your check clears when the transfer of funds succeeds.
In addition, whether deposited or used as a payment, a check might be returned for a number of reasons.
- A returned check presented to CR by the Federal Reserve is considered an inbound return.
- A check returned by CR is considered an outbound return
Availability policies define how quickly funds can be made available to the payee.
Availability of funds from a deposited check is based on rules specifically mandated by the Federal Reserve under Regulation CC (Reg CC). Reg CC defines how long a bank can hold funds based on various types of deposits. It's important to understand check processing and how Regulation CC (12 CFR 229) laws effect availability of funds. Learn more about Regulation CC.
COS defines the availability policy of any given deposit when the deposit is successfully received. COS assigns the policy of the deposit based on that business day's deposits to that specific account. You can use the availability policy API to update the policy of a specific deposit.
If the payer has passed a check that the payer FI has not yet processed, they can put a stop payment on the check.
Once a check has been processed by the payer FI, a stop payment cannot be made. Instead, a dispute must be filed by the payer.
If the payee deposits the check after the check has had a stop payment put on it, the payee FI generally charges the payee a penalty fee. The payer bank will likely also charge for the stop payment service.
Usually the check amount, check number and account number is included the stop payment instructions.
For further guidance, please refer to: Reg E 1005.10 Preauthorized Transfer (c) Customer's Right to Stop payment section in the following link:
CR's Positive Pay feature lets you or your customer make sure that only legitimate checks get deposited in their accounts. Either you or the account holder define which specific checks will be accepted. This helps prevent check fraud.
You can think of Positive Pay as the opposite of Stop Pay. In a sense you are providing an allowed list of authorized checks for deposit. Your or your customer provide the check number and amount for authorized checks. COS takes this Positive Pay information and matches it against inbound forward items presented by the Fed. If a match is found the check is paid. Otherwise the check is rejected.
Positive Pay statuses appear in the status field in the Positive Pay responses, and include:
| |
|---|---|
Authorized | The check has been authorized for positive pay |
Paid | An authorized check has been presented by the Federal Reserve and paid by the Bank |
Revoked | The check's positive pay authorization has been revoked |
In regular check calls Positive Pay statuses appear in the positivePayResult field, and include an additional value, Disabled, if Positive Pay is not configured for the check product.
Your product must be configured by CR in order to use the Positive Pay feature. Once Positive Pay is enabled, any checks presented by the Fed that are not authorized will automatically be rejected and returned to the depositing bank.
IMPORTANT The date time within the expiresAt field of the response is ignored. If a check matching that positive pay criteria is received after the date in the expiresAt field it will be automatically rejected and returned to the depositing bank.
Positive Pay API endpoints include:
- POST /checks/v1/positive-pay-authorizations
- POST checks/v1/positive-pay-authorizations/{id}/revoke
