The check payments industry is undergoing a major change, driven by significant technological advances in electronic check processing options and growing merchant demand for these solutions. Because traditional check processing methods are expensive, labor-intensive and increasingly subject to fraud, the question for merchants today has shifted from “Should I consider an electronic check method?” to “Which electronic check method should I choose?”
Although the slow but steady decline in check payments is well documented, checks still comprise a significant portion of merchant transactions. Recent First Data/TeleCheck® research indicates that, within the American population, a core base of check writers exists for whom checks are the preferred method of payment. Merchants cannot afford to lose business by refusing to accept checks, but instead must make checks as effective and efficient as possible. This paper is written for individuals involved in managing check processing in the traditional retail space and aims to provide an objective, analytical framework that will help merchants evaluate electronic check processing options: point-of-purchase (POP) check conversion, back-office conversion (BOC) and Check 21.