What Is Back Office Conversion and Will It Work?
Back office conversion (sometimes referred to as distributed capture, remote capture, remote deposit, accounts receivable conversion (ARC), and electronic deposit) is a relatively new concept that is designed to identify the lowest-cost routing option for a particular check transaction. In theory, a decision is made in the back office of a corporation whether the check transaction should be cleared as a paper check, a Check 21 substitute check, an IRD (Image Replacement Document), Check 21, image exchange, or an ACH.
While it is widely believed that the ACH will continue to be the lowest cost settlement route for most smaller-value items, the NACHA point of sale conversion (POP) rules do not allow for this kind of check conversion to occur. Today, POP requires a signature to be captured the point of sale and for consumers to receive their checks back. Accounts receivable conversion (ARC) rules, on the other hand, are much more conductive to back office conversion. With ARC, only notice must be provided and the merchant retains the check. Should POP ACH rules change to allow back office conversion in a retail environment, corporations will find new benefits in this application.
There are a number of issues surrounding back office conversion as you analyze its ROI. The first, and most important, is that the cost is untested and unknown. The Federal Reserve just came out with their pricing ranges on image exchange and substitute check processing. The costs range from $.15 to $.50 per item and include eight deadlines.
Nuepay currently has a working back-office conversion solution, believing that many of the issues will be addressed. Our solution will include client software and imager interfaces, an administrative console, image storage and archival and least-cost routing capability that will take into account float, depository costs, and other factors important in assessing the best route for a transaction.
To learn more about the back office conversion services that best suit the needs of your business, visit us at www.nuepay.com, email us at sales@nuepay.com or contact a representative by calling 1-800-815-4105.
