EPO in the Cloud

An online processing solution for Check 21 EPO

Fully automated and Web-based processing engine generating electronic payment orders and digital images

Check 21 EPO is our solution for processing electronic payment orders, also known as demand drafts. The Payment21®-system is unique in terms of remotely created payment orders (RCPOs). Using electronic payment orders is a legitimate and commonly used method to collect payments. EPOs, RCPOs and RCCs (remotely created checks) are governed by the U.S. Check Clearing for the 21st Century Act (unlike ACH transactions which are controlled by NACHA-rules).

The Check 21 legislation allows for substitute checks, aka Image Replacement Documents (IRDs). The law permits the recipient of a paper check to create a digital version of the original check, a process known as check truncation, into an electronic format thereby eliminating the need for further handling of the physical document.

An electronic payment order (EPO) is a remote check payment that is made up of an electronic entry which in turn is processed as a physical check draft and subsequently gets converted into a digital check image. An EPO is not created by the paying bank and does not bear a signature applied by the person on whose account the check is drawn. Consequently, an electronic payment order, also know as demand draft, is an item created by the merchant based on the consumer’s consent.

EPOs are used in a variety of ways to process check payments quickly and efficiently: A common example is merchants accepting same-day payments for a utility bill or credit card over the phone or via the Web, helping their customers avoid late-payment penalties and fees. In addition, check drafts originating from electronic payment orders are a commonly used method to collect NSF fees (Non-Sufficient Funds) on returned checks.

Consumers provide the biller with their checking account information and routing number and authorize the biller to create an electronic payment order and/or a paper check and subsequently a digital check image, debiting the consumer’s account. The Uniform Commercial Code (UCC) governs the process of check drafting.

Authorization is indicated on a check draft in the signature blank, usually by a statement such as the following: "This draft is preauthorized by the depositor, no signature required." The check can be deposited at the bank, imaged and processed via Check 21, or imaged and converted to an ACH transaction, at the discretion of the merchant.

Payment21®’s Web-based imaging service allows merchants to automate check truncation and process electronic payment orders in the Cloud. The first step of the procedure allows for printing of paper checks. Check items are printable on demand (POD). Subsequently, the system scans the check drafts in the Cloud and turns these direct debit payments into X9-files known as Image Cash Letter (ICL). Our Check 21-technology then goes ahead and securely transmits the Image Cash Letter to the designated account, after which the transactions are deposited in the merchant's bank account.

We recommend using FED Regulation CC Security Bond Blank Check Stock when printing remotely created payment orders (RCPOs).

To benefit from Check 21 EPO, merchants require a bank account with a financial institution accepting Check 21 Image Cash Letter. Get started by contacting your bank about accepting Image Cash Letter (ICL), and forward us their ICL-specs, so that we can begin working on your integration process.

Begin accepting digital payments in 5 easy steps