Excelling at check processing

CheckAlt Payment Solutions (CheckAlt) is said to be among the country's leading providers of automated and electronic check transaction processing. This may be due in part to the company's ongoing emphasis on exploring new concepts to develop products that help businesses streamline their payment processes in cost effective, yet secure ways.

M. Jeffrey Korbin, Executive Vice President and Chief Operating Officer of the company, co-founded Skyline DirectFed in 2004. The company's objective was to leverage The Check Clearing for the 21st Century Act (dubbed "Check 21") by offering remote deposit capture (RDC), an electronic check service by which paper checks are converted into digital images for electronic clearing and settlement, through either electronic check or automated clearing house (ACH) systems.

In 2009, financial industry veterans George Karfunkel and Shai Stern, long-time supporters of Skyline, joined the fold as co-chairs, adding their industry knowledge and expertise to the management team. It wasn't long before they formed CheckAlt LLC to add e-commerce check processing to the venture's offerings.

In 2010, the Skyline DirectFed name was dropped, and the company became CheckAlt Payment Solutions. Its fully patented services, including CheckAlt RDC and CheckAlt E-check, reportedly enable merchants to accept electronic check or ACH payments from practically anywhere in the nation; CheckAlt RDC can electronically scan checks and deposit funds from almost any place, any time.

Reducing processing fees and time

"It's swift, simple and safe," Korbin said. "CheckAlt is the smartest way to do business."

CheckAlt strives to reduce float time, decrease bank processing fees and provide back-office savings to merchants by using the latest technology to their advantage. Another positive impact is that it helps make payments more eco-friendly by reducing the amount of paper traveling through the banking system.

CheckAlt's offerings can be customized to serve large companies, small enterprises and all types of financial institutions. "There really is no limit to the types of merchants we are able to help with CheckAlt Payment Solutions," Stern said.

Current clients include community banks and credit unions, money service businesses, online merchants, nonprofits, grocery stores, retailers, municipalities and public agencies, collection agencies, educational organizations, political campaigns and property management companies.

The advantages of scanning

CheckAlt RDC enables merchants to scan paper checks and transfer payments directly from one account to another. Thus businesses can handle corporate transactions on their own premises, eliminating trips to the bank or to headquarters.

By reducing float time, bank fees and back-office expen-ses, CheckAlt RDC increases efficiency and profit for any business, Korbin noted. He added that this allows companies to run on lean working capital much like the "just-in-time" approach to inventory management. And CheckAlt's "bank agnostic" processing allows merchants to keep their existing bank relationships.

"The Atlanta Fed told us that we have the best through-rate in the industry, with the least amount of adjustments, the cleanest images and the lowest [number of] corrections," Korbin said.

Desktop management

Michael Smith, CheckAlt's Senior Vice President of Business Development, said the company's RDC's patented software and scanning system includes easy-to-use desktop software that ensures check images are complete and 100 percent accurate before they are generated for upload to the Internet, and this reduces the number of check data corrections. Use of a software application, rather than web-based hosting, allows for faster deposits without the burden of bandwidth issues, he pointed out.

Businesses aren't hindered by slow Internet connections because CheckAlt RDC is a PC-based thick client application, CheckAlt reported. It's compatible with more than 70 scanners, allowing businesses to scan up to 250 checks at a time and process up to 180 checks per minute, even from front-to-back, something other programs can't always do.

Utilizing magnetic ink character recognition in combination with optical character recognition, CheckAlt software pulls the routing and account number, check number and check amount, then consolidates the deposit file and transmits it to the Federal Reserve Banks or to a given business's deposit bank via the Internet for clearing. Within as few as 12 hours, the funds are deposited to the business's account, CheckAlt said.

Extensive reporting and archiving are available locally via a client workstation if the workstation is operating in a stand-alone environment. If the workstation is operating in a network environment, reporting and archiving can be made available either locally or enterprise-wide.

Security measures

CheckAlt's RDC software can read both checks and remittance stubs when they are scanned together. It can also process up to six items as a unit, storing them in a digital "envelope" so a business can refer to specific envelopes later in the desktop lockbox. Clients have the option of adding check verification with Intuit's National Check Deposit Network (NCN), a check payment service offering a comprehensive database of check information. This service allows clients to gain real-time authorization at the POS.

Smith said generating returns is easy with CheckAlt RDC. A business can process images in clearing checks, return files from the Federal Reserve Banks and generate output directly from its core item processor, right from a desktop lockbox. With one click, a merchant can generate an image return cash letter and send it to the Federal Reserve.

CheckAlt's secure servers consolidate and encrypt deposit files to X.9 format and send them to their clients' deposit banks or the Federal Reserve Banks using a secure connection (secure sockets layer processing). CheckAlt also has a firewall in place and monitors any unauthorized access attempts. The CheckAlt team does not touch any of its clients' funds at any point in the transaction chain.

A recently launched update of CheckAlt RDC further improves reporting and invoicing, allowing for one-time payments and providing even faster processing, the company said.

An alternative to paper checks

It's estimated that more than 40 million households use electronic payments today. CheckAlt E-check provides merchants with an inexpensive alternative to traditional paper checks, credit cards, wire transfers and other online payment options.

With CheckAlt E-check, merchants receive funding within 24 to 48 hours from payment and pay a low, per-transaction fee, as compared to the percentage-based fees they traditionally pay for credit card transactions. The CheckAlt E-check also allows them to extend their customer base to include people who prefer not to pay by credit card.

Merchants can email customer invoices directly through CheckAlt E-check and can attach PDF invoices from their own accounting systems. They can also accept "just-in-time" payments over the phone through a virtual terminal or provide a website link to their own branded payment portal.

Merchants receive notification via email as soon as an invoice is paid. Using the reporting module, they can check the status of any invoice and export reports for bookkeeping purposes. The company pointed out that by using one of the check writer databases, and employing 90 internal risk parameters to verify an account's good standing before a payment is accepted, CheckAlt E-check can help prevent merchant losses.

If a check is declined, merchants don't pay a deposit fee. In addition, with CheckAlt, chargeback exposure time is only 60 days, compared with the six-month chargeback exposure for credit card transactions. A paper check can take up to 10 days to clear, but with CheckAlt's E-check, ACH transactions are posted in only 48 hours.

E-check easy to set up

Korbin said CheckAlt E-check allows merchants to avoid paying credit card or wire transfer fees. He added that the system's streamlined avenue for businesses to send and receive invoices reduces accounting errors.

According to Korbin, the CheckAlt E-check application is available on the CheckAlt website and is easy to set up and use; merchants simply apply for an account online and can easily begin sending and receiving invoices and payments with a few clicks of the mouse.

Once an account is in place, merchants can send automated, detailed emails to their customers, providing them with the option to pay through this method. The merchant is then immediately notified when payment is received and posted. Using CheckAlt E-check, merchants also no longer have to manually balance invoices.

Why should the feet on the street be interested in offering RDC and e-check services? Merchants won't have to waste time going to the bank or waiting for checks in the mail. Sounds like a value-added service, and that could mean merchant stickiness.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.