What Are Certified Funds, Really?

The only thing more frustrating than not knowing something is feeling like you’re the only person that doesn’t know. However, when you start navigating the world of banking terms, you’ll find that you’re actually in good company. A lot of people hear banking terms all the time and they never stop to really think about what it actually means. The last thing you want to do when it comes to your finances is not know information that can truly make a difference. Knowing all of your options during a transaction can actually help you negotiate. So when a vendor or a service company tells you that you will need to pay in certified funds, what does that really mean, exactly?

First and foremost, you should understand that certified funds means that they are trying to make sure that they have a guaranteed way of making sure that your payment is valid. Unfortunately the world is filled with people that would defraud like crazy if they could, which is why vendors have to remain vigilant against fraud payments at all costs. It cuts into their profit lines, which in turns makes their products more expensive as they have to cover for those expenses. It’s just better to deal in certified funds for all parties involved.

So, what are certified funds exactly? Cashier’s checks, money orders, wire transfers, and traveler’s checks are all examples of certified funds. Once you get the amount in question, you can’t reverse that payment unless in case of fraud of theft. However, you should notice that we didn’t list credit cards as being part of the certified funds list. That’s because they are far from being accepted as certified funds. This is because you can file a chargeback on your credit card very easily, which hurts merchants very badly. It’s to the point where if the payment processor receives too many chargeback requests, they will shut down the merchant’s account. If a merchant has had problems with chargebacks in the past, they’ll end up just going with certified funds before they would actually risk losing their processing account again. It can be hard to move payment processing centers, especially today when customers are so used to handling things in one type of payment center over another.

Now that you know a little bit more about certified funds, you can go out and get things done today!