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Check validation services

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Definition Edit

There are two kinds of check validation services — those that have direct access to customer checking account balances (positive files), and those that depend on information gathered from a variety of other sources. These sources include records of a consumer’s transactions with the system and data reported by participating institutions, not actual account records. Because these files contain only information that is used to disallow transactions, they are called negative files.

Overview Edit

Some systems provide only an indication that the transaction is good, while others indemnify the merchant against loss.

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