Everything ACH

POP – Point of Purchase a.k.a. the Walmart experience

I like to call POP the Walmart experience as I believe Walmart has been the single largest adopter of POP to date.  If you want to experience POP for yourself, go to your local Walmart store and write a check.  Here’s what will happen…the cashier will gladly accept your check for your purchases.  They will then run the check through a MICR reader and print out a receipt (it looks a lot like a Credit Card receipt) and ask you to sign it.  After you sign the receipt, they hand you a copy and your check (which has been voided) and you go on your merry way, purchases in tow. 

 So, how does it work?

 Let’s start at the beginning.  POP should only be used for Business to Consumer, debit transactions and they will always be a single one-time transaction.  It is important to note that the whole process will always start with acceptance of a check/source document.

 Authorization:  The authorization requirements for POP are pretty specific.  They’re based on a written authorization (source document/check) and proper notice provided to the Receiver – posted in a prominent and conspicuous manner.

 The posted notice should read:  “When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction.”

 OR

 ”When you provide a check as payment, you authorize us to use information from your check to make a one-time electronic fund transfer from your account.  In certain circumstances, such as for technical or processing reasons, we may process your payment as a check transaction.”

 In addition to the above notice, until January 1, 2010, your notice should also include the following text:  “When we use information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day you make your payment.” 

 As I mentioned, the copy of the authorization and receipt look much like a Credit Card receipt and can satisfy the requirements that the authorization must be in writing and then signed or similarly authenticated^*.  As with all authorizations, it must be readily identifiable as an ACH authorization and clearly and conspicuously state its terms. 

 I mentioned using a MICR reader in my opening paragraph and so I figured I better tell you what it is.  A MICR reader is simply a device designed to read the numbers across the bottom of your check.  POP requires that you use a MICR reader when processing POP transactions.  Of course, if it misreads or rejects, you can manually key enter the information, but otherwise you have to use the reader. 

 Not all checks are created equal: 

 Not all checks or sharedrafts are elegible to be converted during the POP process.  A check or sharedraft can be used as a source document if it;

           Has not been previously negotiated

          Has not been previously voided

          Contains a pre-printed serial number

          Is drawn on a consumer account

 Receipt Requirements:

Originators must, at the point-of-purchase, provide Receivers with a receipt that contains the following minimum amount of information:

           Originator name (merchant)

          Company (merchant)/third-party service provider telephone number;

          Date of transaction

          Transaction amount

          Source document check serial number

          Merchant number (or other unique number that identifies the location of the                                 transaction)

          Terminal City and State

 Record Retention:  Merchants/Originators are required to maintain copies of the authorization for CCD transactions for 2 years beyond Settlement Date of the transaction.

  * Notes:

 Amount:  POP transactions must be in the amount of $25,000.00 or less.

 Formatting requirements: 

           Originators must ensure that the name of the Receiver or ID number or code which

          identifies the transaction or customer is included within each POP entry.

           Originators should ensure that the check serial number from the Receiver’s source     document is placed within the Check Serial Number Field of the POP entry.  Further,          the word “check,” abbreviations such as “ck” or “chk,” or other merchant codes must      not be included within the field. Here are some examples of incorrect and correct   applications:

           INCORRECT             0001234

                                      000000000001234

                                      CK# 001234

                                      CK1234

                                      1234 6532986002

                                      CK1234 48832817

           CORRECT                1234

 That’s a lot of information for such a simple process, but I wanted to make sure you had all the important stuff.

 WEB is next, stay tuned.

This entry was posted on Tuesday, October 20th, 2009 at 10:02 AM and is filed under Beginner, Education. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.