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The Green Sheet Online Edition

March 09, 2009 • Issue 09:03:01

Check 21 POS solutions

By Christian Murray
Global eTelecom Inc.

As credit card fees continue to squeeze merchants and processors alike, ISOs and merchant level salespeople (MLSs) are evaluating other potentially profitable payment solutions to offer merchants, such as Check 21 and back-office processing services.

In the current economic climate, many merchants can no longer rely on credit lines to expand operations or even to buy business supplies. Businesses lacking access to credit are relying on corporate and business checks. More checks are being used both at the POS and for business-to-business transactions. In turn, the check industry as a whole is experiencing revitalization.

Check processing has been declining slowly for years as consumers have increasingly opted to use credit and debit cards at the POS. Retailers have relegated check processing primarily to back-office environments, but they are now starting to see convenient, cost-effective ways to implement check processing at the POS.

Now is the time for ISOs and merchant level salespeople (MLSs) to recognize this and implement sales strategies that push check services to merchants.

ECC coming down a notch

Electronic check conversion (ECC) has traditionally been the solution of choice for ISOs serving retailers who accept checks. ECC will continue to be a viable solution for many. But some of the disadvantages associated with ECC are not encountered when using remote deposit capture (RDC).

Some of the issues for merchants using ECC at the POS are:

  • Not being able to accept corporate or business checks from customers

  • Having to identify size of checks and auxiliary fields before accepting checks

  • Tedious training of staff on how to follow guidelines to prevent chargebacks

  • Multiple procedural steps at the POS that slow down checkout times

  • Having to physically transport to the bank checks that cannot be converted through the automated clearing house (ACH)

  • Dealing with ongoing ECC receipt requests from check processors that request them

Many ISOs and MLSs are unaware Check 21 options, such as RDC, are available for merchants to use at the POS. Some check providers are even offering a guarantee on the checks accepted at the POS. This represents an enormous opportunity outside of back-office environments.

Benefits of RDC

The ease of use and streamlined checkout associated with RDC are key to attracting merchants who have struggled with ECC. Benefits of employing Check 21 solutions at the POS include:

  • Giving merchants the ability to accept all types of checks at the POS: personal, government, travelers, cashier, certified and equity line of credit, as well as money orders and more

  • Eliminating restrictions, since no ACH or NACHA requirements can be imposed on processors

  • Quickening checkout times

  • Streamlining online reporting systems

  • Reducing information requests from check processors

  • Making guarantee options available from some check providers

  • Eliminating trips to the bank to deposit checks that cannot be converted through the ACH

As you can see, a multitude of benefits can be offered to merchants. Taking checks can become simple and headache-free.

Back-office fair game

Today, only a small number of MLSs are trained and actively selling back-office Check 21 solutions to merchants. But RDC can be easily added to the sales arsenal, enabling MLSs to serve an array of retail environments without having to adapt to complex sales cycles or alter the way they prospect for business.

Many ISOs and MLSs begin selling Check 21 solutions only when their merchant customers inquire about them. In most cases, if merchants ask for electronic check imaging solutions, agents typically scramble to gather only what they need to get the paperwork done without understanding the process.

Some MLSs may refer the matter to ISOs; some might contact vendors or ISOs for last-minute training and attempt to sell the deals themselves. But this practice is not effective for landing high-volume back-office opportunities.

Very few check providers train MLSs on how to sell to these markets. However, because of the similar pricing as occurs on bankcard transactions which result in similar income streams, Check 21 options are now on the radar of an increasing number of ISOs.

MLSs should take responsibility for getting educated in this arena, and ISOs ought to support and train agents to target merchants' back-offices. Selling into these environments is complex but very rewarding.

Everybody needs cash flow, and selling exclusively into complex retail and business environments is not viable for many. Not just any sales agent can close back-office opportunities without also closing regular merchants to maintain steady incomes. Also, some ISOs and MLSs may have established residual streams, but they may lack experience with the market and must allow time to for learning before they can close these types of deals with regularity.

Check 21's time

As more retail Check 21 options become available at the POS and new terminals are introduced, trends will shift and sales will skyrocket.

Efficient acceptance of all types of checks is an important option for merchants nationwide. MLSs should locate markets ripe for these solutions and start selling to them right away. Uncovering the providers that support new POS applications should also be a top priority.

Adapting to the changing market and the needs of businesses is the very fabric of what makes a true payment specialist. The easy days of selling bankcard solutions alone are fading away. Credit cards will never go away; neither will check processing. The dynamics will continue to evolve. Those who sit back and watch will miss the historic opportunity to be a part of something big.

For some, finding the right formula for effective prospecting and locating target merchant types is the only thing standing in the way. For those who have experience selling check solutions, it is a matter of hitting the ground running. end of article

Christian Murray is the Director of Business Development for Global eTelecom Inc. He has more than 12 years' experience within the payments industry. GETI provides check processing and gift and loyalty solutions. For more information, visit www.checktraining.com and www.giftcardtraining.com, or contact Christian directly at 877-454-3835 or cmurray@globaletelecom.com.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

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