The agent contacts the data entry operator at the guarantee center who enters the card number, amount, and agent identification on the host processor. The vendor acts as an agent for a credit card issuing financial institution.
The transaction is sent to the issuing financial institution. If the account is not held there, the transaction is switched via a credit card interchange network to the appropriate credit card financial institution. Card authorization results in check guarantee approval being returned to the leisure time services center either by the data entry operator or increasingly by voice response units.
The service center creates a check guarantee by the vendor, payable to the consumer, endorsed to and cashed by the service center. Fees for the service are approximately k% of the check amount— I % to the service center operator, 1% to the credit card issuing financial institution, and 2% to the funds verification/check guarantee services offerer.
At settlement, funds (including net fees) are transferred from the credit card financial institution to the check guarantee services offerer’s account.
Latest service offerings include installation of POS terminals which provide for electronic authorization/check guarantee transactions. The terminal incorporates a credit card stip reader and a check printer. Electronic transactions are completed in one to two minutes, including check endorsement, as opposed to a range of five to eight minutes for voice-check guarantee.