In Defense of Leasing

Ed Freedman:

I just got the latest issue of The Green Sheet today [Jan. 10, 2005, issue 05:01:01], and there were some sort of negative comments [published in the Forum section about] applauding a salesperson for [signing] a $59 per month/48-month lease. Their premise is, of course, that the terminal was worth $800 or less, and that the salesperson took advantage of the merchant.

I would argue back that there's nothing wrong with leasing. Simply put, why does Starbucks charge me over $1.50 for a $0.20 cup of coffee? Well, there are many reasons like paying for real estate, salaries, etc., but simply put, I'm willing to pay it.

And if a salesperson can bring value in any form to a merchant, and the merchant is willing to pay it, then I say let 'em pay it. Why doesn't every big, powerful company just give everything away at cost? They don't, and why should our industry be any different? Leasing is good in a slim-margin, cut-throat business such as ours.

Chris Collins
Total Merchant Services

A Clarification on Check 21

I have noticed that a number of comments made in The Green Sheet say something like what I found on page 60 of the Dec. 27, 2004 publication [issue 04:12:02] that said, "The Check Clearing for the 21st Century Act, or Check 21, allows banks to transmit electronic images of checks instead of flying or trucking paper checks across the country."

Check 21 does not validate the exchange of check images. It only validates check truncation when the original check is replaced with another piece of paper, the substitute check.

While Check 21 encourages the use of technology to enhance the check payment system, Check 21 is not a requirement for and does not provide the laws to support the truncation of paper checks with check images.

The exchange of check images continues to require the agreement of the two exchanging parties. I suspect the confusion arises from Check 21's use of image technology to reprint a special image copy of the original check. Check 21 has labeled this special image copy a substitute check and makes it, not the image itself, the legal equivalent of the original check.

David Walker, President
Electronic Check Clearing House Organization (ECCHO)

David:

The Check 21 Act raises some complex issues that can at times be over-simplified. Thank you for clarifying the language and intent of Check 21.

Editor