Interesting wrinkle from First Data.
Electronic Check Acceptance Introduced Nationwide; The Power of the Check Without the Paper
HOUSTON, June 17 /PRNewswire/ -- TeleCheck(R) Services, Inc., the world's
leading check acceptance company, today announced its national launch of
Electronic Check Acceptance (ECA) -- converting and processing paper checks as
electronic checks at the point of purchase. TeleCheck's roll-out of ECA, in
which checks are processed similarly to credit cards and the paper check is
returned to the consumer, follows nine months of extensive testing and a
limited market introduction. TeleCheck, a subsidiary of First Data
Corporation (NYSE: FDC), authorized more than $98.3 billion in checks in 1997.
"Converting paper checks to electronic checks uses proven technology to
help our merchants speed processing and reduce the amount of paper being
handled, while still providing consumers with the convenience and float of
checks," said Randy Templeton, senior vice president of strategic marketing
and development for TeleCheck.
Today, most of the 65 billion paper checks written each year flow through
several manual processes, with checks transported across town or across
country for settlement before being returned in the consumer's next bank
statement. Using existing technology, check transactions can be moved
electronically through the banking system, just as a credit card transaction
is processed beyond the point of purchase without a paper sales draft or
physical card.
During the test, TeleCheck processed 125,000 transactions at 300 merchants
in six markets: Boston, Cleveland, Houston, Orlando, St. Louis and San Diego.
A strong 82 percent of consumers elected to have their checks processed
electronically when offered a choice.
"Because so many other payments are processed electronically, consumers
aren't surprised that checks are now being processed the same way. A small
percentage of consumers were hesitant to try the new process but we expect
that number to decrease as Electronic Check Acceptance becomes more routine,"
Templeton added.
TeleCheck's ECA process moves transactions through the Automated Clearing
House (ACH) network, and follows National Automated Clearing House Association
(NACHA) pilot rules for electronic checks at the point of sale. NACHA, a
leader in the payments industry, is an association representing more than
13,000 financial institutions.
"The ACH network has been in operation for almost 25 years and has proven
to be a safe and economical payment system, processing billions of commercial
transactions such as Direct Deposit of payroll, and direct payments such as
insurance premiums and utility bills. Electronic checks at the point of sale
is a natural extension of the capabilities of ACH," said Louise Clynes,
director for NACHA's Electronic Check Council.
How ECA Works
At the point of purchase, the consumer presents a paper check as usual.
Then, TeleCheck converts it into an electronic check through a payment
terminal that reads the banking information off the bottom of the check. The
consumer simply signs a printed receipt authorizing the electronic
transaction, and the paper check along with a copy of the authorization slip
is returned to the consumer. A complete description of the transaction is
included in the check writer's bank statement for reconciliation purposes, and
consumers retain the same rights as today in disputing fraudulent items posted
to their account.
Consumer Benefits
Consumers continue to benefit from the float of a paper check, since the
electronic check is processed through the banking cycle in approximately the
same amount of time as a traditional paper check. In addition, since the
check writer keeps the physical check, the risk of name, address and other
personal information being used fraudulently is substantially reduced.
Reconciling bank statements is easy, since ECA checks usually clear within
two days. A complete description of the transaction, including merchant name,
settlement date and amount, appears on the statement with other electronic
transactions, such as direct payroll deposits or ATM transactions. Consumers
wanting more information, or a consumer brochure, can call TeleCheck's ECA hot
line, 1-800-697-9263.
Merchant Benefits
ECA eases merchant operations and deposits by virtually eliminating labor
intensive paper handling and time consuming trips to the bank. Funds are
automatically deposited into their account, and merchants need never see a bad
check again because all returned checks are sent directly to TeleCheck. By
making the process faster, safer and easier, checks will become an even more
viable payment option for consumers.
The TeleCheck system provides Electronic Check Acceptance (ECA), check
guarantee, check verification, collection services and new account screening
to more than 200,000 retail, financial institution, travel and association
clients through a sales and service network with offices in more than 90
cities in the United States, Canada, Puerto Rico, Australia and New Zealand.
In 1997, Houston-based TeleCheck authorized over $98.3 billion in checks and
processed more than 1.9 billion check inquiries. For more information about
TeleCheck and its products and services, visit the Internet site at
telecheck.com.
First Data Corporation (http://www.firstdatacorp.com) is one of the
world's leading providers of transaction processing services -- credit, debit
and pre-paid card processing; payment systems; electronic commerce and
information-based services to both businesses and consumers. In partnership
with clients, primarily financial institutions, and a worldwide Western Union
agent network, First Data processes the information that allows consumers to
pay for goods and services by check or card or any form of payment, except
cash -- at any point of sale, whether at the retail counter or on the
Internet. And, through Western Union, First Data is the global leader
spanning more than 150 countries in money transfer services that are
convenient, fast and reliable. With an international employee base of more
than 36,000, First Data delivers innovative solutions and quality service to a
broad base of clients and consumers all needing to transact business --
anytime, anywhere.
SOURCE TeleCheck(R) Services, Inc.
Company News On Call: prnewswire.com or fax,
800-758-5804, ext. 103364
CONTACT: Jalinna Jones of TeleCheck(R) Services, Inc.,
713-599-7359 Marjorie Fowler, of Bates Southwest, 713-267-7303,
for TeleCheck(R) Services, Inc.
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