Abstract: A demand deposit account data processing system is provided that allows merchants to settle transactions on line and in real time and that automatically processes transactions in a number of exception conditions. The system comprises demand deposit account data that originate from a data source, at least one point of sale terminal adapted to receive that data to initiate a transaction, a central computer system, first communication means integrated with the point of sale terminal for communicating with the central computer system, data storage means integrated with the point of sale terminal for storing the data, and second communication means integrated with the central computer system for receiving the data from the point of sale terminal and communicating with the data source. This configuration permits the central computer system to communicate with the data source to settle the transaction on line or through traditional automated clearing house channels.