Acquirers To Offer Electronic Check Acceptance Service

TeleCheck Services, a Houston-based check acceptance company, has signed a group of acquiring banks todistribute Electronic Check Acceptance, a payment service that converts paper checks presented at retail locations into electronic transactions.

The banks are Bank Boston Merchant Services; Chase Merchant Services; Huntington Merchant Services, Texas Independent Bankers; Cardservice International; Wells Fargo Merchant Services; and Wachovia Merchant Services.

Atlanta-based Wachovia Merchant Services, a joint venture of First Data Corp. and Wachovia Corp., already has almost 300 merchant customers using the service. The bank has also begun offering TeleCheck's Internet check acceptance to its e-commerce merchants.

"We're always looking to be able to offer additional payment options to merchants and we felt this was a good fit," said Jerry Ferlisi, senior vice president and general manager at Wachovia Merchant Services. "It's also a good retention tool. The more services we provide to merchants, the more likely they're going to continue to process with us long-term."

The service provides merchants with improved cash flow, streamlined operations and reduced paper handling. It also reduces the frequency of bank deposits and eliminates having to chase down bad and fraudulent checks. For banks, it offers the opportunity to develop new revenue streams from transaction fees and hardware sales.

TeleCheck, a subsidiary of First Data Corp., introduced the service two years ago, selling it directly to merchants. Over time, the distribution strategy was expanded to include channel partners. TeleCheck has about 80% of the electronic check acceptance marketplace, according to Jerry Mosbacher, senior vice president of strategic distribution.

The ECA service converts customers' paper checks into electronic items at the point of sale and delivers funds directly to the merchant's account. Consumers sign a printed receipt authorizing the electronic transaction and receive the canceled check, along with a copy of the authorization slip. The transaction then moves through the ACH network. Electronic check returns and collections are TeleCheck's responsibility. "We've made our program look much like accepting credit cards," said Mosbacher.

The service is available only through the Eclipse terminal, which also processes credit and debit cards. For new merchants or locations, the cost is under $1,000, comparable to that of a credit card terminal. Existing TeleCheck customers must upgrade their terminals to Eclipse. Fees are similar to those for credit card transactions.