As a savvy Walmart shopper, you‘re likely always on the lookout for the best deals and payment methods that fit your financial needs and habits. While credit and debit cards, cash, and even digital wallets like Walmart Pay have become increasingly popular choices, there‘s one classic payment option you may still find yourself reaching for on occasion: the personal check.
However, if you‘ve ever tried to pay by check at Walmart, you may have encountered an unexpected hurdle – the dreaded "check declined" message. In most cases, this isn‘t a reflection of your actual bank account balance, but rather the result of Walmart‘s use of third-party check verification services like Telecheck and Certegy.
So what exactly is going on behind the scenes when you hand over that paper check to the Walmart cashier? Let‘s take an in-depth look at how Telecheck and Certegy work, Walmart‘s long history with check verification, and what it all means for you as a consumer.
The Nitty Gritty of Telecheck and Certegy
Telecheck and Certegy are two of the leading check verification and guarantee services used by retailers across the U.S. When a merchant like Walmart opts to use one of these services, they are essentially outsourcing the risk assessment of check payments to a specialized third party.
Here‘s a step-by-step breakdown of what happens when you pay by check at a Walmart that uses Telecheck or Certegy:
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At the register, the cashier will ask for a government-issued photo ID (usually a driver‘s license) along with your check.
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The cashier scans your ID and the check, capturing vital data like your name, address, driver‘s license number, and checking account details.
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This data is securely transmitted to Telecheck or Certegy‘s system in real-time.
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The verification service rapidly cross-references your information against their extensive database, which includes records of your check writing history from thousands of retailers and financial institutions across the country.
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Complex algorithms analyze this data to assess the statistical risk of your check bouncing due to insufficient funds or being potentially fraudulent. Key factors that may influence this risk assessment include:
- Frequency and dollar amount of recent check transactions
- Total number of checks written in the past year
- Any history of bounced checks or check fraud indicators
- Consistency of personal information across data sources
- Presence of unpaid debts or delinquent accounts
- Overall length and stability of your checking account history
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Within seconds, Telecheck or Certegy delivers a recommendation to Walmart to either approve or decline the check based on the risk assessment.
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If approved, your check is processed as payment and you‘ll sign the receipt to complete the transaction. If declined, the cashier is unable to accept your check and you‘ll need to provide an alternate form of payment.
According to a 2019 report by Global Market Insights, the global check verification services market is expected to surpass $1.5 billion by 2025. Walmart‘s use of Telecheck and Certegy plays a significant role in this, given their massive transaction volume as the world‘s largest retailer.
Walmart‘s Longstanding Relationship with Check Verification
Walmart first began using check verification services back in the 1990s, when personal checks were a much more common form of payment. At the time, bad checks were a major source of financial losses for retailers. In fact, the National Retail Federation estimated that bounced checks cost merchants $18 billion in 1993 alone.
Telecheck was one of the pioneers of the check verification industry, founded in the 1960s as a subsidiary of credit reporting giant Equifax. They began partnering with major retailers like Walmart, Kmart, and Circle K in the early 90s to help combat check fraud.
Over the years, Walmart has continued to rely on Telecheck as their primary check verification provider, though some store locations have switched to Certegy (now part of Fidelity National Information Services) in more recent years.
Despite the rise of alternative payment methods, Walmart still processes a significant volume of check transactions each year. While exact figures aren‘t publicly disclosed, a 2017 article by CheckWorks estimated that Walmart processes over $10 billion in checks annually across its U.S. stores.
The Pros and Cons of Check Verification for Walmart Shoppers
So what does all of this mean for you as a Walmart customer who may want to pay by check? There are potential benefits and drawbacks to be aware of.
On the plus side, Walmart‘s use of Telecheck and Certegy allows them to confidently accept a wider range of checks without taking on excessive financial risk. This means that even if you don‘t have the strongest check writing history, you may still have a decent chance of your check being approved, especially for smaller purchase amounts.
The automated nature of the verification process also means you can typically get a decision on your check within seconds at the register. And if your check is approved, the funds are guaranteed by Telecheck or Certegy, so you don‘t have to worry about your check bouncing and incurring extra fees.
However, the potential downsides of this system are hard to ignore. Having your check declined can be embarrassing and frustrating, especially if you believe you have sufficient funds in your account. The algorithms used by Telecheck and Certegy aren‘t always 100% accurate, and can sometimes flag legitimate checks as high risk.
Telecheck and Certegy also keep records of every check they process – including the ones they decline. So if you have a check declined once, that information is added to your file and may make it more likely your checks will be declined again in the future.
From a privacy standpoint, some consumers may not feel comfortable with the amount of personal and financial data being shared with these third-party verification services every time they try to pay by check. And if you do have a legitimate grievance with a declined check, getting the issue resolved with Telecheck or Certegy‘s customer service can sometimes be a hassle.
Tips for a Smooth Check Experience at Walmart
While you can‘t control how Telecheck or Certegy will assess your check writing risk, there are steps you can take to minimize the chances of an unexpected decline at the Walmart checkout:
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Keep your checking account in good standing. This means consistently having sufficient funds, avoiding overdrafts, and promptly addressing any bounced checks that may occur.
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Be cautious about writing checks from new accounts. Telecheck and Certegy place high value on longstanding accounts with stable histories. Opening and quickly writing checks from new accounts may trigger a red flag.
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Make sure the personal details on your checks and ID match. Inconsistencies between your check, ID, and what the verification system has on file for you can lead to a decline.
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Avoid writing checks for extremely large purchase amounts. High-dollar checks are often seen as riskier than smaller ones. Breaking up large purchases into multiple checks or using an alternative payment method may be wiser.
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Have a backup payment option ready. There‘s always a chance your check won‘t be approved for one reason or another. Keeping a credit or debit card on hand can save you a lot of hassle.
If your check is declined and you believe it was done so in error, your first step should be to contact Telecheck or Certegy directly. Federal law entitles you to request details about the reasoning behind your check being declined. The contact information for the verification service used should be printed on your receipt.
The Future of Checks and Verification at Walmart
As digital payment options continue to expand, it‘s natural to wonder how much longer personal checks will remain a viable way to pay at Walmart and other major retailers. While check usage has undoubtedly declined (an estimated 60% since 2000 according to CheckWorks), they are far from obsolete.
A 2020 report by the Federal Reserve found that checks still account for 7% of non-cash payments in the U.S. And for certain demographics, particularly older adults and those without access to traditional banking services, checks remain an essential payment method.
That said, Walmart has made significant efforts in recent years to encourage customers to adopt alternative payment options. The launch of Walmart Pay in 2015, which allows shoppers to store payment information in the Walmart app and check out quickly using QR codes, has been a major push in this direction.
Walmart also offers its own branded credit cards and prepaid debit cards as part of efforts to provide a range of payment solutions and foster customer loyalty. They even offer check cashing services for a fee as an alternative to using personal checks for purchases.
As consumer payment habits continue to evolve, it will be interesting to see how Walmart and other retailers adapt their check policies and verification systems. Some industry experts predict that advanced technologies like biometric authentication and blockchain could eventually revolutionize the way checks are processed and verified.
For now, Telecheck and Certegy remain Walmart‘s trusted gatekeepers in determining which personal checks make the cut. While the verification process isn‘t perfect, it does allow Walmart to continue accepting a classic form of payment while mitigating losses in an era of digital financial innovation.
