1. Figure 28.1 POS Conversion Customer’s Bank Merchant’s Bank Customer
Step 4
Customer’s
Bank
Merchant’s
Bank
Step 3
Step 5
Step 4
Step 2
Step 1
Customer
Merchant
Step 1: The Customer gives a check to the Merchant. The Merchant runs the check through a
reader (capturing the information on the MICR line of the check) and returns the paper
check to the Customer.
Step 2: The Merchant sends to its bank a message including both the amount of the transaction
and the data from the check about the Customer’s bank account.
Step 3: The Merchant’s Bank sends an ACH debit entry to the Customer’s Bank.
Step 4: The Customer’s Bank responds to that entry by removing funds from the Customer’s account
and sending them to the Merchant’s Bank (through the ACH network).
Step 5: The Merchant’s Bank credits the Merchant’s account.