Introducing:
Electronic Check
Service
It’s Your Money. . . Why Wait For It?
Presented to:
Agenda
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Market overview and opportunities
Technology advances
NOVA’s Electronic Check Service
Competitive Comparison
ECS Processing Solutions
Summary
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The Era of the Electronic Check
 Checks account for approximately half of
all consumer expenditures in the U.S.
– Estimated 36 billion checks written annually
 Retailers search for more efficient means
to process checks
– Paper handling and fraud
 Electronic check conversion offers an
incredible opportunity for retailers
– Checks remain the largest non-cash
form of payment at the POS
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The Case for Conversion
 Extensive handling by financial institutions
and retailers makes paper expensive
– 6 to 12 touches per check, on average
 Check fraud and collected funds are costly for
retailers and other businesses
 Electronic checks offer reduced handling and
risk
– Result in big savings to the bottom-line
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It’s Your Money…..
Why Wait for It?
ECS Benefits to Retailers
 Faster Access to Funds
 Reduced Costs & Labor
 Single Depository Bank
Relationship
 Minimized Risk
 Improved Reporting
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Sample Cost Savings
$3,763,622
Merchant Profile
 Checks/Year
 Number of Locations
 Average Check Amt
 Check Volume (%sales)
$4,000,000
1,091,175
1,795
$59
25%
$3,500,000
$3,000,000
$2,500,000
$2,000,000
ECS Cost Savings
 Costs Savings Total
 Cost Savings/Check
 Cost Savings (%)
$2,376,872
$2.18
63.2%
$1,386,751
$1,500,000
$1,000,000
$500,000
$0
Current
ECS
Data taken from actual merchant
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Powerful Market Drivers
 Electronic check market is proven
– 1.3 billion processed in 2003
 Visa estimates 14 billion paper checks still written
at POS —enormous opportunity
 Check 21 Act provides legal recognition of
electronic checks
 Opens door for electronic checks
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Technology Advances Accelerate
Move to Electronic Checks
 Frequent MICR rejects and poor
imaging quality hindered early
acceptance of electronic checks
 Recent advances in high-quality,
image-capture technology have greatly
increased the success rate for
conversion at the POS
 Quality images are essential for collection
 Lower-cost storage and faster CPU speeds
make it practical for retailers to store and
access digital receipts
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NOVA ECS Solution Offering
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NOVA’s Electronic Check Service
 Innovative product that supports full
portfolio of flexible solution and service
level options
– Not a one-size-fits-all solution
 Provided in partnership with leading
financial institutions
– Extension of services from bank partner, not
third-party provider
– Retailer gets one-stop solution for debit and
credit cards, electronic check, consolidated
statements and even online reporting
– Can by integrated into Analysis System
 Extensive image storage and reporting
capabilities
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Only NOVA ECS….
 Process any type of check
– Consumer
– Business / Corporate
– Convenience
 Presented any way
– At the point of sale (POP)
– Through the mail / drop box
(ARC)
 Through the appropriate “rail”
– Direct DDA Access
– ACH conversion
– Check Replacement Document
 With the proper risk mitigation /
protection
– Conversion with Guarantee
– Conversion with Verification and
Collections
– Conversion with Verification
– Conversion Only
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Checks Supported with ECS
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Consumer checks
Business Checks
Corporate Checks
Convenience Checks
Checks NOT Supported with ECS
 Money orders
 U.S. treasury checks
 Cashier’s checks
 Federal Reserve checks
 Government Checks
 Payroll checks
 Third-party checks
 Travelers checks
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Point of Purchase (POP) Solution
 Enables merchants to convert consumer
check payments received in a face-to-face
environment into electronic transactions
– Consumer present/Check present
– Online real-time or batch delivery
 Utilizes combination of Visa’s POS Check
network, the ACH network and Check
Replacement Documents (CRDs) for
presenting and clearing
– Real-time access to more than 35 million
accounts representing 30% of DDA’s
nationwide with a potential for 90% of the DDAs
in the U.S.
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Accounts Receivable Conversion (ARC)
Solution
 ARC is used for check present/consumer
absent transaction environments
– receivable payments
– mail order receivables
– drop-box/lock-box environment
 Customers are provided a notice explaining
that checks will be processed electronically
 Offer Consumer Opt Out Service with PC
Solution
 Utilizes the ACH network and Check
Replacement Documents (CRD’s) presenting
and clearing
– Online real-time or batch delivery of transactions
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CHECK CLEARING “RAILS”
 Direct DDA (VISA POS Check): Consumer checks drawn on Visa
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POS participating banks are routed to their bank, ensuring that the
funds are available. This reduces the risk typically associated with
check acceptance. Real-time access to more than 35 million consumer
accounts nationwide with access to over 30% of the DDAs in the U.S.
ACH Network: Consumer checks drawn on non-participating banks
are processed via ACH. The ACH network is a safe reliable system
used by hundreds of thousands of companies for Direct Deposit of
payroll and by the Federal government for benefits payments, such as
Social Security. The ACH system is a closed, private network that is not
accessible to the general public.
Check Replacement Documents: Business, corporate and
convenience checks are electronically captured and recreated as
Check Replacement Documents. These CRD’s run through the
traditional banking system in accordance with the Check Clearing Act
for the 21st Century, also known as “Check 21” legislation.
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Direct DDA Market Share – August 05
g Up to 10%
Participating DDAs:
g 10% to 19%
g ≥ 30%
g 20% to 29%
WA
ME
MT
ND
MN
OR
ID
VT
SD
NY
WI
MI
WY
RI
PA
IA
NV
NH
MA
NE
IL
UT
CO
CA
IN
NJ
OH
WV
KS
VA
MO
SC
AR
MS
AK
MD
OK
TX
DC
NC
TN
NM
DE
KY
HI
AZ
CT
AL
GA
LA
FL
Source: Visa Member DDA Market Share Data
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Direct DDA Access Banks
Source: Visa U.S.A. POS Check Service Production Data – August 2005
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ECS Service Level Options
 Conversion with Guarantee
– Checks are converted into electronic transactions and all funds are
guaranteed
– All paperwork is eliminated – no follow-up needed from merchants
– The retailer assumes no risk for all qualified and approved transactions
 Conversion with Verification
– Checks are imaged and converted into electronic transactions
– Routed for verification either through the participating Visa bank or
through EnCircle for ACH submission
– Retailer retains the risk of returned items for all transactions
 Conversion with Verification and Collections
– Offers all the advantages of conversion and verification, while eliminating
the need for businesses to perform their own collection activity
– Retailers retains the risk on returned items, but will have all monetary
returned items automatically handled by EnCircle Collections after the
first resubmission.
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ECS Service Level Options (cont’d)
 Conversion only
– Checks are imaged and converted into electronic transactions, retailer performs
own authorization
– Retailer retains the risk of returned items for all transactions
 ECS Custom Combination
– “Custom-designed” risk programs are available, consisting of any combination of
the above services, triggered by a predetermined dollar threshold.
– Retailers retain the risk of loss on returned checks, depending upon the specific
combination and dollar thresholds selected
 NSF Service Fee Processing
– All service levels except Conversion with Guarantee support the ability to
electronically resubmit transactions that have been returned for nonsufficient funds, electronically collect an NSF service fee from the
consumer’s account, and automatically fund the business’s account with
these fees—eliminating the labor and lengthy time-to-collection of manual
systems.
– NSF Service fee not available with ARC.
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Competitive Comparison
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NOVA ECS: The ONLY Flexible Solution Provider
Service
NOVA
ECS with Guarantee
ECS with Verification
ECS with Verification and Collections
All in one processing check/credit/debit
Funding in 24-48 hours
Consolidated reporting
Business check acceptance and conversion
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Certegy
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Telecheck
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All at a Competitive Price!
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NOVA
ECS
TeleCheck
Paper
Offers Guarantee
Y
Y
Offers Verification
Y
On-line access to DDA account
Electronic settlement
TeleCheck
ECA
Certegy
Paper
Certegy
ElecCheck
Y
Y
Y
Y
N
Y
N
Y
N
N
N
N
Y
N
Y
N
Y
Direct electronic collection placement
Y
N
N
N
N
Centralized proprietary Image Archive
Y
N
Y
N
N
Merchant in-house Image Archive
Y
N
Y
N
N
Offers consolidated reporting
Y
N
N
N
N
Provides detail transaction reporting
Y
Y
Y
Y
Y
Consolidated merchant card and check
support
Y
N
N
N
N
One phone number to call for card and
checks
Y
N
N
N
N
Y
N
N
N
N
Competitive Review
Service Levels
Other Services
Reporting
Customer Service
On-site merchant training option
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ECS Processing Solutions
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ECS Solution Options
 Terminal/imaging solutions
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VeriFone Omni 3730LE, 3750 & 3750 IP
VeriFone Omni 3200, 3210, 3200SE & 3210SE
Hypercom T7Plus, T7PT & T77T
Nurit 2085, 8320 & 8320IP
RDM 6000i Imager
 PC-based software solutions
– viaWARP with Magtek Imager/MSR
 Integrated POS solutions
– IBM imager & IBM ACE software
– Epson imager
– VAR interface solutions
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ECS Image Management Solutions
 POS Image Capture
 Image Batch Archival, Retrieval and Reporting
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Remote batch submission timing
Local batch capture option
Participating and Non-Participating Items
Retrieval with reported transaction data
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EnQuire - Items Reporting
Return Detail:
Store, MICR data, lane, status, ACH
date, tracking, ACH history
Return Queries:
Look for patterns of specific checks,
export to spreadsheet or database and
get data ready for collections
Images:
Stored securely on Payment Archive
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Questions & Answers
Thank You!
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