Now, with no bank in the area, the merchants of this area can go to another town a half hour away called Porterville to do their banking.  Any hotel or retail establishment in a remote location has a real problem in leaving their place of business during business hours to take care of their banking needs. 

This problem creates an opportunity for a new method of depositing checks that does not require the hotel or merchant to physically leave their business and go to the bank.  The solution is called “check truncation”. 

The hotel or merchant buys a device that will electronically read the micro-number on the check being submitted for deposit, and issue a debit order to the check writers bank for the amount that was purchased by the check writer.  Check truncation is not check guarantee.  By itself, it does not present the ability to provide the hotel or merchant with the guarantee that the checks that they present for debit will all be collected on.  There is no way to discern whether there is funds in the check writers account at the time that the check was tendered.  However, there is an opportunity to know that the check being tendered is a “valid” checking account. 

The check truncation program does offer a form of “basic” check guarantee services for a slightly higher fee, per check.  However, when a merchant accepts a check at the point of sale, and deposits it in their bank, they are still not guaranteed payment if the check comes back to them with the remark, “Non-Sufficient Funds” (NSF), “Account Closed”, or “Stop Payment”. 

Therefore, just the check truncation program by itself puts the merchant in a remote location in the same situation that they are currently in...with the advantage that they do not have to spend time away from their business, plus the expenses of driving and gas. 

Check truncation utilizes a “stand alone” check reading device.  The solution is particularly attractive to small hotel and Bed and Breakfast operations where the person who runs the establishment does it all.