First Check 21 Wave: Remote Image Capture

American Banker, November 12, 2004
By Steve Bills

Following are excerpts from an American Banker article that discusses how remote capture for corporate customers will likely be the first major impact of Check 21.

And one analyst said he expects more banks go after corporate deposits via image. "This is a very natural entry point, low-hanging fruit for the banks to pursue and for vendors to pursue," said Richard Winston, a partner at the New York consulting firm Accenture Ltd. "It's definitely a key play right now."

Creative Payments Solutions, a subsidiary of BB&T, said this week that it began a test of its remote capture system last month with another BB&T subsidiary, Prime Rate Premium Finance Corp., an insurance premium finance company in Florence, S.C. Creative Payments is working with the Dallas image-software vendor Carreker Corp.

Harold Williams, a senior vice president at Creative Payments, said Prime Rate is imaging up to 3,000 items a day - 70% personal and 30% business checks - using a desktop scanner. Those images are transmitted to a Creative Payments center in Wilson, N.C., for posting and collecting. Mr. Williams said his company could either produce substitute checks for clearing as traditional paper items, or convert the files into ACH payments using ARC.

Today it is cheaper to clear those checks with accounts receivable conversion. But as more banks begin to settle transactions across image exchange networks and no longer have to convert some of those remotely deposited files into expensive substitute checks, the costs could become more comparable.

And because there are some limits to ARC - notably that only consumer checks are eligible for ARC conversion - the two technologies could soon be positioned as head-to-head competitors for corporate receivables.

"Long term, we'll have to wait and see what happens" on pricing and adoption of the competing technologies, Mr. Williams said. "Our view is that there's a place for both."