The Broken Link - Digital Transactions

More documents

Recommendations

Info

ecently adopted NCR Corp.’s solution for remote deposit capture with backoffice conversion. For Hy-Vee, NCR’s e-check product addressed problems it encountered in an earlier test of POP, says Kevin Reed, assistant vice president and controller. Hy-Vee, one of the nation’s top 20 grocers with 224 stores, processes 2 million checks a month. Hy-Vee tested conversion at the point of purchase and “we were not happy with the results,” Reed says. “It was too slow and too expensive. It slowed down our front end and we didn’t like that. The model we had was more expensive than depositing paper.” Using Dayton, Ohio-based NCR’s ImageMark-Commercial Passport technology, Hy-Vee’s second attempt at electronic check conversion is proving more successful. “It didn’t affect our customers other than they had to be aware of it,” Reed says. “It didn’t affect our cashiers so there was no change on the front end. Of course, it does affect our bookkeeper in the back office—it takes a little big longer to scan the checks.” The only extra investment Hy-Vee has made in electronic check Although there is growing interest in electronic check conversion, retail check conversion will peak in 2010 as check usage at the point of sale continues to decline, according to a new report from Celent LLC. More than 50% of checks presented at the retail point of sale in 2010 will be converted using point of purchase (POP) or back-office conversion (BOC) methods, while checks are expected to account for only 4% of point of sale transactions, the report says. POP, which has a head-start on BOC, will maintain its lead as the favored method of check conversion, accounting for three-quarters of retail e-check volume, Celent says. That’s due in part to Wal-Mart Stores Inc.’s rollout of POP to its 3,400 U.S. locations coupled with processor First Data Corp.’s dominance of the market with a POP-based product offered through its TeleCheck Services Inc. subsidiary. Only 4% of surveyed retailers were already using or piloting BOC, while 6% said they were interested and evaluating the business case, the report says. Fifteen percent said they had heard of BOC but had no interest, and Climbing to the Peak, Then Down 55% said they had never heard of it. Twenty percent of retailers said they had heard of BOC and were possibly interested in it. Of retailers surveyed, 45% said they prefer POP check conversion while 25% preferred BOC. Thirty percent said they have no plans to implement either. Celent also found that two-thirds of retailers use verification and guarantee services, which capture magnetic ink character recognition (MICR) data on the check at the point of sale, and already have the hardware capability for POP check conversion. The report—“Back-Office Conversion: Too Little Too Late?”—is based on interviews conducted between July and November 2007 with 16 treasury and finance staff at retailers across multiple segments, eight BOC solution providers and six large billers using the accountsreceivable conversion (ARC) e-check code. Celent also interviewed financial institutions currently offering or planning to offer BOC as well as administering a Web survey to more than 300 retail treasury staff. Recent and Projected e-Check Dynamics • Checks as % of POS Payments • % of POS Items Converted • No. of Retail Checks Converted (millions) 824 1,114 45% 1,112 52% 55% 963 56% 836 60% 728 29% 464 16% 15% 14% 15% 12% 269 148 162 10% 9% 120 168 7% 7% 64 6% 1% 2% 3% 3% 4% 5% 4% 3% 3% 2% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Celent LLC 16 • digitaltransactions • February 2008
conversion is to buy a check scanner for each of the stores. The roll-out of the NCR technology began in August and is expected to be completed in the second quarter, Reed says. Hy-Vee is far from alone in its rejection of POP, says Denis Burgeron, director of product management for NCR Payment & Imaging Solutions. “What almost every retailer that we’ve talked to is interested in is not affecting the in-lane experience at all—treating the customer like you would today but taking their payments to a back office within the retail establishment and imaging them there,” he says. “They get the efficiencies of a streamlined process because it’s all being digitized, but they’re not impacting the customer experience at all.” Wal-Mart, however, has expressed satisfaction with POP. Mike Cook, a Wal-Mart executive who spoke at NACHA’s annual payments conference last April in Chicago, said the retailer was nearly done rolling out POP in all of its 3,400 U.S. Wal-Mart stores, and added that the operational hassles for which POP has been criticized are overblown. Wal-Mart’s uptake is probably the biggest reason why the growth in POP’s quarterly transaction numbers has been so strong in the past two years (chart, page 15). Meanwhile, drug-store chain CVS Caremark Corp. reportedly is strongly interested in POP, industry sources say, though a spokesperson said the company hasn’t announced any plans for electronic check acceptance. Merchants also are finding value in e-check products that incorporate other business functions. BankServ, a San Francisco-based processor that offers everything from ACH services and electronic bill payments to international corporate money transfers, markets one such solution. BankServ’s e-check solution can be integrated with popular accounting software applications software, such as Intuit Inc.’s QuickBooks and PeachTree. “Almost every other remote deposit product or desktop deposit product was designed to solve the banking issue of taking the deposit to the bank,” says David F. Kvederis, president and chief executive. “Our product is designed to help a business, particularly a small business, post their books, post their accounting system and oh, by the way, it happens to deposit the check.” ‘Millions, Not Thousands’ The availability of BOC led to a broad-based revisiting by merchants large and small of the whole concept of electronic check acceptance, Celent’s Meara says. In a recent survey, Celent found that awareness of back-office conversion solutions rose to 45% of surveyed retailers through August, compared to 75% awareness of POP after seven years. Apriva solutions meet all card association standards and we are the only gateway to achieve PCI and PTS security certifications for wireless and Ethernet based POS terminals. Contact us to find out how you can offer your customers leading edge security. Call 480.421.1210, e-mail pos@apriva.com or click www.apriva.com. © Copyright 2008 Apriva, All rights reserved. February 2008 • digitaltransactions • 17
Page 1: VOLUME FIVE, NUMBER TWO • DIGITAL
Page 4 and 5: SOME COMPANIES STAND OUT FOR OBVIOU
Page 6 and 7: D I G I T A L T R A N S A C T I O N
Page 8: THE GIMLET EYE FEBRUARY 2008 • VO
Page 11 and 12: challenges to interchange. Last yea
Page 14 and 15: TRENDS & TACTICS TRENDS & TACTICS A
Page 16 and 17: ACQUIRING February 2008 digitaltran
Page 20 and 21: In addition, 67% of retail treasury
Page 23 and 24: Changing consumer behavior regardin
Page 25 and 26: Earn Interchange with United Cash S
Page 27 and 28: Inc., has announced enhancements to
Page 29 and 30: The SEAA is Back in the SouthEast A
Page 31 and 32: From the merchant perspective, deco
Page 33 and 34: Revolutionary Times Call for a Revo
Page 35 and 36: Yes, we’re on the Web. And in you
Page 37 and 38: SECURITY February 2008 digitaltrans
Page 39 and 40: they don’t want approved. Some cu
Page 41 and 42: ENDPOINT Behind the Experimentation
Page 43 and 44: ©2007 Digital Check Corp. All righ

The Broken Link - Digital Transactions

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?