ECP Patent
It is possible that the ECP concept (see GS issues 97:08:01 and 97:08:02), which we like to refer to as Point-of-Sale Truncation, is in fact a patented concept. According to our reading of the U.S. patent office patent number 5,484,988 assigned to Resource Technology Services, Inc., companies attempting to "eliminate the need for paper checks with all bank reconciliation being accomplished electronically," are infringing on this U.S. patent, unless granted rights of use by the patent holders.
It seems that Robert R. Hills of St. Augustine, Florida and Henry R. Nichols of McLean, Virginia have applied for and received a patent on the process necessary to truncate checks at the point-of-sale and settle such checks using the ACH system. This will come as some shock to a number of ISOs and companies who are dabbling in the process and may not be aware of the patent.
We will keep you informed as we find out more about Resource Technology Services and their relationship with some of the ECP providers currently operating test programs.
