HERNDON, Va. - Back-office conversion, the newest form of check conversion, became available in the marketplace March 16. BOC allows retailers and billers that accept checks at the point of sale or bill-payment locations to convert eligible checks to ACH debits in the back-office.
"Back Office Conversion will enable financial institutions to provide additional value to their customers in a business environment where many checks are still used," said Steve Ellis, NACHA's chairman and the executive vice president of Wells Fargo & Company's Wholesale Banking Group. "As consumers and businesses continue to move from cash and checks to electronic forms of payments, financial institutions continue to find opportunities to provide their customers with value-added electronic services to collect checks."
NACHA estimates that as many as 3.2 billion checks were converted into ACH payments in 2006, an increase of 36 percent from 2005. And the existing form of check conversion in use at many retail locations grew by an estimated 60 percent in 2006.
Several requirements of the BOC rules are intended to ensure customers are properly notified their checks may be converted, that customer-service contact information is provided, and customers have the ability to opt out. The notification requirements are consistent with those required by the Federal Reserve Board under Regulation E.
Back Office Conversion also allows financial institutions to convert eligible checks received in image files to ACH debits.
To help businesses and FIs understand BOC, NACHA's "Guide to Implementing a Back Office Conversion Entry Program" provides ACH Network participants with specific economic, operational, legal, and risk-management considerations. The Guide is available at NACHA's Online Publications Catalog.
