According to the U.S. Federal Reserve, 42.5 billion checks were cashed in 2000. Now, to facilitate the acceptance of checks at member bookstores, the American Booksellers Association is introducing a check guarantee program at discounted rates from Certegy Check Services, a leading service provider to U.S. merchants. The newest ABA affiliate company, Certegy offers customized check authorization programs with discounted rates to minimize risk from NSF (Not-Sufficient Funds) checks, to control payment expense, and to expedite processing and settlement.
"The fees are less than for a credit card," explained Cindy Knowles, vice president of marketing at Certegy. "With checks, merchants typically see a 50 percent discount over credit cards, and in any environment with low margins... saving money on payment processing is an advantageous thing. And because Certegy guarantees checks, the merchant doesn't have to worry about any collections issues."
ABA member booksellers have a choice of three programs from Certegy: ElecCheck, Enhanced Warranty, and SettleSmart.
Through ElecCheck, Certegy streamlines the check guarantee approval and settlement process. The highlight of this program, said Knowles, is that the merchant will be paid its funds within 24 to 48 hours in a process similar to that of credit cards. Since checks are processed electronically via an MICR (Magnetic Ink Character Recognition) reader that connects with the POS terminal system, they do not have to be deposited at the bank. Knowles noted that avoiding bank deposits also means avoiding deposit fees as well as NSF fees. Certegy's discounted ElecCheck rate is from .81 to .87 percent per transaction, depending on the equipment purchased by the bookseller. A transaction fee of 20 cents for ACH processing applies.
The most widely used Certegy program is the traditional Enhanced Warranty combined with SettleSmart for paper check acceptance, said Knowles. It protects the merchant against forged, fraudulent, stolen, and NSF checks. Checks are approved or declined via Certegy's POS equipment. If an approved check is sent back from the bank unpaid, the bookseller can simply submit it to Certegy for reimbursement and payment will be received within 30 days. With Enhanced Warranty, checks still must be deposited to the merchant's bank.
ABA member booksellers are eligible for an exclusive rate of .75 percent on Certegy's Enhanced Warranty program. There is a $25 set-up fee, a $15 monthly minimum, and other discounted monthly fees that may apply. Equipment may be purchased for either the ElecCheck or Enhanced Warranty program and is compatible with most Bank of America credit card terminals.
SettleSmart offers the features and rates of the Enhanced Warranty program with the added benefit that returned checks are consolidated directly into a Certegy funded bank account, which eliminates returned check fees from the bank. It also obviates the step of sending in claims after receiving a check with insufficient funds. Said Knowles, "The merchant will know that if a deposit is made today, all the checks are guaranteed by Certegy, and they will never see a bad check. It takes the merchant out of the collections process all together."
For more information about the ABA check programs, contact Certegy at (866) 496-2637, or via e-mail, including store name, address, phone number, and ABA member ID number, to firstname.lastname@example.org. --Karen Schechner