A New Era For Payment Processing Hardware

For David Lant, there's nothing better than a returned check - returned to the customer that is. Lant, vice president of marketing for RDM Corp., (Waterloo, ON) is referring to check truncation, the process of capturing information from a check and returning the check to the customer to keep, at the point of sale. This process is possible, he says, with today's check-reading technology. RDM manufactures check readers, and check and image verification equipment. While RDM sales are currently near $3 million, Lant expects check reader sales, and RDM revenues, to soar, thanks to this new process.

New Opportunities For VARs
The check truncation process takes a paper check and turns it into an electronic transaction. "It's the bridge between paper and electronic transactions," says Lant. He says VARs can benefit from this new technology. "VARs can easily go back to their present customers who are using check readers and sell check truncation as an add-on. For new customers, the new check readers can simply be included with point of sale components," says Lant.

Ideal markets for check truncation include grocery stores and large retailers. "Basically any business that has a large volume of customers paying by check will benefit from check truncation," says Lant. With more than 18 billion checks written annually in the United States, Lant says there are definitely opportunities for VARs to sell check readers.

Selling The Benefits Of Check Truncation
VARs can sell retailers on the many benefits of check truncation, including:

• Funds availability - Check truncation makes funds available to the retailer in approximately 24 hours. The process is not as instantaneous as using a debit card. However, retailers will not have to wait one week to 10 days for a check to clear a bank.
• Customer acceptance - Checks are a familiar method of payment for many people to use, says Lant. Check truncation, unlike debit cards, does not allow direct access to customers' accounts, something many customers appreciate. Lant has observed check truncation pilot programs. He says customers have readily accepted check truncation, including having their checks handed back to them for their records.
• Data capture - Retailers can capture customers' names and addresses during the check truncation process. Lant says this helps retailers build databases of customers for targeted mailings.
  
  Features To Consider
  When evaluating check readers, Lant says VARs should consider the size and durability of the reader. Retailers with limited counter space benefit by using readers with a compact U-shape. Most readers will last from three to five years, reading between 20 and 100 checks per day. Another feature Lant points to is the ability to image checks, including signatures, for long-term record storage. Because they are computer files, the images can be stored on a server or using a tape, or optical or magnetic disk.