Push Cheque is designed to fundamentally alter the merchant/consumer relationship as it exists today, by moving purchase and other financial transactions from a “pull” model, wherein a consumer gives a merchant detailed information allowing the merchant to draw money from a consumer’s accounts, to a “push” model, where the consumer provides no such information to the merchant, but instead actively sends their payments directly to the merchant in the form of a Push Cheque or “on demand substitute check.”
To use a physical analogy, it may be viewed as moving from a model where we as consumers are required to hand a merchant our wallet, and allow them to take out the money for our purchases, to one in which we alone hold our own wallet, and we hand the merchant only the money we intend them to receive.
Check 21 – Grab/Pull
The traditional methods for moving payments electronically from a consumer or borrower to a merchant or lender have been carried out under what is described as a “pull” or “grab” model. In this method of transaction handling, the payer gives to the merchant some set of identifying information (bank account routing numbers, etc.) along with some form of “authorization” statement. The merchant or lender then uses that information to submit a transaction against the payer’s account to “grab” or “pull” the funds.
This is the entire basis of the existing, traditional “Check 21” architecture.
Here are some key benefits of this solution:
- Authorization – The merchant has no authorization records to maintain. Authorization history is available online 24x7x365 for each merchant, for all the transactions they have processed.
- ESign Agreement – The ESIGN Act is a federal law passed in 2000. It grants legal recognition to electronic signatures and records if all parties to a contract choose to use electronic documents and to sign them electronically. Push Cheque payments include a confirmation of an eSign Agreement, for each payment, a copy of which is provided to the merchant, to confirm that their customer authorized their Push Cheque.
- Incorrect or Multiple Postings – The amount of the transaction is completely controlled by the Payer. Each transaction is individually registered and covered by the Payer’s eSign Agreement.
- Posting Against Insufficient Funds – As all transactions are processed only at the express authorization of the payer, with their checking account number and current balance may be confirmed by the payer or their bank, from the privacy of their own computer or cell phone, merchants cannot initiate any transaction against insufficient funds.
Through specific and selectable combinations of these features, Push Cheque may be tailored to suit the needs of many distinct communities of merchants, both banked and unbanked:
- Merchants and Lenders – Businesses and individuals engaged in the selling of goods and services, including financial services.
- Agents – Sellers of communications and financial processing services to Merchants.
- Consumers and borrowers banked or underbanked.