The Broken Link - Digital Transactions

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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 Nothing beats reprints from Did we write about you recently? Do you want to use the article for marketing or educational purposes? It’s easy. With Digital Transactions’ reprint program, you can: • License complete rights to a PDF of the article; • Post it to your Web site; • E-mail it to colleagues or prospects. But that’s not all. When you license the PDF reprint rights from Digital Transactions, you can have an unlimited quantity of commercial-quality reprints made. You control the process: choose the printer, pick the time. And you avoid paying publisher’s typical reprint markups! Call Publisher Bob Jenisch at 877-658-0418 or e-mail him at bob@digitaltransactions.net 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
COMPONENTS February 2008 digitaltransactions ATMs: Not Dead, Not Done Thomas E. Honey More versatility can mean extended life for the ATM, says an executive with a firm that enables ATMs for prepaid card dispensing and sees potential for distributing a wide range of other media. Mark Twain once lectured that reports of his death were greatly exaggerated. A similar view about ATMs may be true. Since its inception, the ATM has achieved an institutionalized role as the premier self-service device for banking functions and other consumer services. Consumers’ trust in, comfort with, and reliance upon the ATM for its time-and-place convenience value won’t let it die, but prompt its greater versatility and extended life. Automated cash dispensers were invented in 1967, but soon became deposit acceptors in the early 1970s with the introduction of Docutel’s Total Automated Teller. Being part of an ATM installation team for my bank in 1971, I can easily recall bankers’ published doubts about the ATM’s role and future. In fact, most concerns focused on cost justification. The ATM was a major technological invention for a staid banking industry at a time of substantial consumer distrust of computer-related technology. Intuitive logic by most banking leaders couldn’t make practical sense of it. It was seen as a symbol of modern progress for banks that could perhaps replace the need for more human tellers. A counter-intuitive view held that the ATM was a time-and-place convenience-value device for consumers who valued convenience and anonymity in conducting their personal banking business. Changes in consumer needs, thinking, and behavior ultimately would determine the innovation’s success provided it was given enough time to demonstrate both revenue and cost benefits to banking. This was clearly a long-haul proposition that required a generation of acceptors and users to enjoy and demand the greater time-and-place convenience value that ATMs offered them. A Stage Two World By 1986, ATMs were ubiquitous nationally, banks were charging for their use, and regional ATM card interchange had commenced. The so-called less-cash transaction that often accompanied paycheck deposits had all but disappeared. More depositors were comfortable with direct pay deposit as 24-hour ATM availability afforded them anytime access to their funds. By the early 1990s, surcharging of ATM transactions was permitted and off-premise ATMs began to flourish—they now number nearly two-thirds of America’s 400,000 ATMs in use today. Today’s situation can be viewed from the standpoint that ATMs have always been at the mercy of consumer demand for cash. Though ATMs offer and conduct a wide range of customer services and functions, cash withdrawals constitute nearly 80% of all ATM transactions, Dove Consulting reported in 2003. Cash withdrawals have declined significantly to levels not seen for many years. The expanded use of bankissued debit cards, introduction of prepaid and gift cards, and expanded cash back at the point of sale have contributed substantially to this decline. Shipments of new ATMs in the U.S. have also shrunk. Unproductive off-premise ATMs have begun to be withdrawn, with the prospect that many more are headed for the junkyard. The future viability of ATMs and of the independent sales organizations that deploy them is in jeopardy. Alternatives to the ATM began to appear about two years ago. The most heralded has been the multifunctional kiosk that dispenses cash and gift cards, cashes checks, makes foreign remittances, and pays common bills. Such kiosks are expensive to acquire and maintain. Consumer acceptance has been spotty—mainly because of, in this writer’s opinion, the lack of consumer-friendly and intuitive navigation of the device, especially when compared to the entrenched familiarity of the ATM. February 2008 • digitaltransactions • 19
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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 18 and 19: ecently adopted NCR Corp.’s solut
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Page 27 and 28: Inc., has announced enhancements to
Page 29 and 30: The SEAA is Back in the SouthEast A
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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

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