Merchant Capture Device - Reg D Transaction Limits

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Question:

In your article on Reg D, <a href="http://www.bankersonline.com/compliance/gurus_cmp080502o.html">Transfer of Funds: Do sweeps count against the transaction limit?</a>, you pointed out unlimited transactions between accounts at the bank, done at an ATM, in person, made by mail and Direct Customer Contact. Now where does the merchant capture device fit in this picture, since you have basically taken the bank to them with direct access to move money between their accounts. It seems the customer is standing in front of a piece of equipment very similar to an ATM. Should these transactions count?

Answer:

Yes, these transactions count, although the regulation is falling behind the times in specifically addressing some of this new technology. If you are talking about a merchant capture device that converts checks to an electronic image that is then processed as a deposit by a bank, the fact remains that this transaction began as a check payable to a third party and would be limited to three such transactions per month or statement cycle.

First published on BankersOnline.com 1/07/08