Thus, regardless of whether payment is being made by physical check or electronically, situations can arise in which the payer's account is overdrawn and checks or payment authorizations will not be honored because of insufficient funds in the payer's account.Thus, there exists a need for methods and systems that prevent completion of postdated financial transactions until the specified future date.Methods and systems that prevent completion of postdated financial transactions until the specified future date is provided.
The encryption key used to encrypt the information is associated with the date on which the transaction is authorized to be completed.
The encrypted information is provided to the payee.
Generally, the issuing of a check by the payer indicates to the payee that the funds for the check are available at that time.
In some situations, however, the payer desires to provide a check to the payee dated some date in the future, also known as postdating, with instructions to the payee that the check should not be presented until such future date.
The depository institution presents the check to a check clearing system (such as the Federal Reserve in the United States), which then handles the movement of the check to the issuing institution and the corresponding movement of funds from the issuing institution to the depository institution.
With recent advances in technology, the check clearing process can also be performed electronically.
Postdating a check may not prevent the payee from presenting the check for payment before the date written on the check, and also may not prevent financial institutions from honoring the check when presented.
This is because the date that is written on a check has no function in the check clearing process.
The issuing bank provides a daily decryption key that allows decryption of information encrypted using the key associated with the corresponding date.
Thus, only when the maturity date of the transaction has arrived will the payee or depositing bank be able to obtain the decryption key that will decrypt the encrypted information necessary to complete the transaction.
Since the encrypted information can not be decrypted until the date associated with the encryption key, the financial transaction can not be completed until such date.