The Broken Link - Digital Transactions

In addition, 67% of retail treasury
staff surveyed who were aware
of BOC expressed interest in BOC
compared with 60% for POP. Some
6% are evaluating the business case,
with virtually all doing so comprehensively—evaluating
all e-check
options, Celent found.
“At the end of the day, the merchant
just has to sit down and try
to find out whether it makes sense
to them or not,” says Adil Moussa,
an analyst with Aite Group LLC,
Boston. “That has really been the
challenge so far. If they see the
value, they will do it.”
Indeed, as more merchants learn
of the operational efficiencies to be
gained by converting paper into electronic
transactions, electronic check
services are becoming an easier sell,
TeleCheck’s Wallin says. TeleCheck
in October began offering its Electronic
Check Acceptance service to
Meijer’s large department/grocery
stores in Michigan, Illinois, Indiana,
Kentucky, and Ohio.
Most early adopters of
TeleCheck’s e-check solution were
regional merchants, while larger
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national players sat on the sidelines
to see how electronic check conversion
technology would evolve,
Wallin says.
“Now that there are good solutions
for both BOC and POP, a lot of
merchants are at the place where they
can sit down and do a really full evaluation
and they’re realizing they need
to make a move,” he says. “We’re
starting to almost hit a critical mass
from that standpoint.”
Many merchants are beginning to
realize that electronic check conversion
offers the same advantages as
electronic processing of credit and
debit card transactions, Wallin adds.
“A lot of merchants are looking at
paper checks similar to they way
credit card acceptance was back in the
old knuckle-buster days,” he says.
What’s more, with a number of
major national players changing to
electronic check conversion with good
results, “anybody who just wanted to
watch to see if the solution was going
to be successful now has a resounding
answer to that question,” Wallin says.
TeleCheck has seen “a muchreduced
merchant attrition rate for
those on our electronic check product
as opposed to any merchant on a
paper product,” Wallin adds. “Generally,
once somebody is processing
checks efficiently and effectively
and once they get the operational
costs out of their business related
to handling paper checks, they can’t
imagine ever going back.”
BankServ’s Kvederis also reports
strong interest in electronic check conversion
products. In November 2006,
“a lot of people were kind of talking
about it and saying they were going to
do something, but we hadn’t seen any
material uptake in volume,” he says.
But by November 2007, BankServ
saw “some very strong momentum.
We’ve gone to over 12,000 depositors
from 1,200 depositors a year ago.”
Most of the interest is coming
from businesses such as property
managers and accounting and law
firms, Kvederis says, adding that he
expects other businesses to join the
move to electronic check conversion.
“There is still a large education
process that has to go on to the
business community,” he says. “Most
of them don’t know it is available.
Almost all of them, when they find
out it’s available, want to try it. We’ve
barely scratched the surface on users
on this. There’s going to be millions
of them, not thousands.”
Not all processors have seen a
sharp increase in customers asking for
electronic check conversion, however.
“We’ve seen a slow interest
increase. It has not been people
breaking in the doors to adopt it,” says
Jeff Thorness, president and chief
executive of Allen, Texas-based processor
ACH Direct Inc., which is
piloting BOC solutions with utilities
and governmental agencies.
Yet, Thorness says he expects
demand for e-checks, particularly
BOC, to rise this year. “We’ve got
this early adoption where people are
testing the waters,” he says. “I would
expect the interest levels and adoption
rates to start climbing in 2008.” DT
18 • digitaltransactions • February 2008