Outside the United States the decline in check usage in favour of debit cards and credit cards has meant that cheques are rarely accepted by merchants thus rendering cheque verification services obsolete.
In the United States, there are a number of third-party companies that provide check verification services.
[citation needed] These databases are often bundled with "check guarantee" services like ChexSystems.
[5] This type of information is a valuable tool for loss prevention because it identifies historically or habitual check bouncers who are more likely to re-offend.
The results are based on account validity, so there is no way to know if the check will actually clear when it is presented, or if the exact dollar amount is going to be available.
It reduces the number of bad payments that are deposited due to human error, fraud or account status.
[10] Some banks still offer merchant funds verification, while others are limiting the information they will provide to telling you if the account is open with a positive balance, only.
It can be valuable in locating fraudulent checks or drafts, and in getting contact information for the bank for merchant funds verification or account validation.