Glossary

Creditron as a solutions provider contributes to the advancement of payment processing knowledge by providing a clear definition of common terms used in the payment processing industry.

creditron-glossaryGlossary
Creditron as a solutions provider contributes to the advancement of payment processing knowledge by providing a clear definition of common terms used in the payment processing industry.

ABA
American Bankers Association: This is the association which administers the standards for MICR encoded checks in the United States.

ACH
Automated Clearing House: The network, governed by NACHA, that processes electronic payments. Payments may be initiated by a variety of means including web, telephone, or accounts receivable check conversion.

ARC
Accounts Receivable check Conversion: Refers to the process by which a personal check received as a payment for an invoice may be converted to an electronic (ACH) payment for clearing overnight.

Amount Field
A field in the MICR line of a check, which identifies the amount for which the check is being drawn. This is the only field which is encoded after a check is written.

Auxiliary On-Us Field
Part of the MICR line of a check. Usually used as a serial number field to identify the sequential check number.

Binary Image
A scanned image in black and white (no gray levels).

CAR
Courtesy Amount Recognition: Machine reading of the hand written numerical amount of a check.

Checkdigit
A calculated number, inserted into a scanline to ensure accuracy. Calculation is performed when the line is printed, and again when it is read. If the checkdigits do not agree, then the information is incorrect.

Check 21
The Check Truncation Act for the 21st Century: This legislation essentially gives an Image Replacement Document (IRD) the same legal status as a check. This allows truncation of checks at the point of presentment and clearing of the payment by the exchange of images.

CPA
Canadian Payments Association: This is the association which administers the standards for MICR encoded cheques in Canada.

DPI
Dots per Inch: A measurement of image resolution. 100 or 200 DPI are common in check imaging.

DPM
Documents per minute, a measure of track speed in a transport.

Drop-Out Ink
Background print which is transparent to an optical scanner or image camera.

EBPP
Electronic Bill Presentment and Payment. Using the internet or e-mail to present bills and collect payments.

Encoding
The process of printing MICR information on a check. Often used to refer specifically to amount field encoding.

Endorsing
Stamping or printing deposit account information on the back of a check.

Font
Formation of readable characters. Common readable fonts include OCR-A, OCR-B, and E-13B.

Gray Levels
A measure of the depth of an image in shades of gray. Although binary (black & white) images are more common, 16 or 256 gray levels are sometimes used in check imaging applications.

ICR
Intelligent Character Recognition: Machine reading of hand writing or print, interpreted from a image scan.

IRD
Image Replacement Document: A reproduction of a check from a digital image of the original. Under new Check 21 legislation, an IRD will have the same legal status as the original check.

Lockbox
A third party remittance processing service.

MICR
Magnetic Ink Character Recognition: Machine reading of a special print in magnetic ink, using a magnetic head. The most common use of MICR is to read the bank information printed on the bottom of checks in E-13B font.

NACHA
National Automated Clearing House Association: The leading association for setting standards and providing solutions for electronic payments. NACHA sets the regulations for ACH transactions.

OCR
Optical Character Recognition: Machine reading of print in a readable font, using an optical read head. This is the most common type of recognition used in remittance processing.

On-Us Field
A field in the MICR line of a check. It identifies the account against which the check is being drawn.

Posting
Applying payments to accounts receivable.

Remittance
A payment, usually in the form of an invoice stub and a check.

Remittance Processing
Automatic processing of payments, usually by scanning the invoice stub and encoding the following check. This process creates a bank deposit, and accounts receivable posting file.

Retail Lockbox
A high volume (but usually low dollar) lockbox operation.

Routing Code
A field in the MICR line of a check. Together with the transit field, it identifies the bank on which a check is drawn.

Scanline
A group of characters in a single line, printed in an OCR readable font. Usually contains one or more checkdigits.

Stub
The tear-off portion of an invoice or statement, which is returned with the check.

TIFF
Tagged Image File Format: A format used for image storage. This is a standard format also used for FAX transmissions. Group 4 compressed TIFF is the most common implementation of this standard.

Transaction
A balanced group of credit and debit documents.

Transit Field
A field in the MICR line of a check. Together with the routing code, it identifies the bank on which a check is drawn.

Upload
Posting of transactions in a data file to the host accounts receivable system.

Wholesale Lockbox
A low volume, (but usually high dollar) lockbox operation.

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