What is a nominal check?

A check payable is one that bears the name of the beneficiary, that is, the person authorized by the issuer to receive the money.

The nominal check can be deposited in the designated beneficiary’s account or, if it is not crossed, receive it at the cashier. The nominal check can only be deposited into someone else’s account if the beneficiary approves it  .

The beneficiary can only allow someone else to receive the money for him if it is a  check made payable to order  . This modality allows the transfer of the payment right to third parties through the endorsement.

If only the recipient’s name appears on the check, without any other indication, it is considered a nominal check of the order.

If the check issuer wants to prevent the beneficiary from transferring the document to a third party, they must write a  cashless check  . For that, it is enough to write, after the name of the beneficiary, expressions such as “do not order”, “not transferable”, “prohibited endorsement” or another equivalent. In this case, only those who had the indicated name can receive payment, either at the ATM or by depositing into an account.

All checks over USD $ 100 must be made by name  . If this is not respected, the bank will return the check.

Non-nominal checks, that is, those that do not indicate to your beneficiary, are called  bearer checks  and can be received by anyone.

How to endorse a nominal check?

To endorse a nominal check and allow a third party to receive it, the beneficiary must sign on the back of the check. It is also important to include other information, such as a document number and a contact.

Anyone who endorses a check and passes it to a third party remains responsible for their debt. That is, if the check has no funds, whoever tried to receive the payment will charge the person who sent the check, and not the original issuer.