Converting Paper Checks to Electronic Checks Gives Banks and Billers Streamlined Processing, Says Meridien Research; Americans Are Stuck on Writing Checks.

Business/Technology Editors

NEWTON, Mass.--(BUSINESS WIRE)--Nov. 1, 2001

A system that converts checks into electronic entries will start to reduce the flood of paper checks when it is rolled out next March, says a new report from Meridien Research. Currently being piloted under the aegis of the National Automated Clearing House Association (NACHA), the program lets lockbox providers convert checks into Automated Clearing House entries.

Meridien projects that as a result electronic-check volume will start to climb rapidly beginning in late 2002.

Financial institutions haven't been able to wean American consumers from writing billions of paper checks, which they use far more often than citizens of other industrialized countries. Despite predictions of the demise of the paper check, volume has not diminished.

"With check `electronification' you don't have to change consumer behavior. Billers get the benefit of more streamlined processing and better collections," says the author, Meridien Research senior analyst Jeanne Capachin. "This service will be essential for financial institutions providing lockbox services because billers will demand it. The effort to electronify checks is relatively minor, and several technology vendors are preparing to offer this service to US banks. An additional benefit of turning paper checks into e-checks is that lockbox providers will be able to destroy processed checks, for substantial savings in warehousing and exception-processing costs."

The report includes a case study of Aid Association for Lutherans, a Fortune 500 organization participating in the pilot, and covers key items to watch in the future, such as the proposed federal Check Truncation Act, NACHA rule changes, fraud detection and biller demand.

More information about purchasing the report, "Electronic Checks: Paper Checks Out," can be obtained from [e-mail] or by calling 617-796-2800. A summary and a table of contents are available on www.meridien-research.com

About Meridien Research

Meridien Research of Newton, MA, provides analytical research services to users and providers of financial industry technology. Meridien Research targets three technology areas of strategic importance to financial services firms: eFinancial Services, Trading & Risk Management and Customer Relationship Management. Each practice delivers reports detailing new issues and challenges and uses its knowledge to advise clients in technology related decisions. Visit www.meridien-research.com/press to register for announcements as new research becomes available. For media relations, contact Parallax LLC at 781.235.7025 or [e-mail].