News

WFS to launch check imaging pilots in 1Q 2003

December 22, 2002

MOSINEE, Wis. -- Wausau Financial Systems (WFS), along with Zions Management Services Company (ZMSC), EDS, and the Western Payments Alliance (WesPay), are organizing a forward presentment pilot for financial institutions to enable the use of image exchange and Image Replacement Documents (IRDs) among participants.

Planned for the first quarter of 2003, the pilot will expand the ability of participants -- all of whom initially will be members of WesPay -- to electronically process a broader range of transactions and clear items directly to paying banks, according to a news release.

To make the pilot possible, WFS is integrating its Optima3 and ImageRPS payment and archive platforms with ZMSC's NetDeposit Image Exchange and Image Replacement platform, a utility that accelerates check processing using image exchange and IRDs.

According to a news release, the agreement between WFS and ZMSC will allow financial institutions to determine at the item level how an electronic item is cleared -- using the new ARC (Accounts Receivable Entry) check conversion rules governed by the National Automated Clearinghouse Association (NACHA), the conversion of checks into electronic ACH transactions, IRD or electronic presentment.

Andy Kurtz, senior product manager at WFS, said in the release that the integration of WFS' Optima3 and ImageRPS products into NetDeposit allows financial institutions to take full advantage of the proposed Check Clearing for the 21st Century Act, (Checks 21).

"Checks 21 will make it easier for financial institutions to capitalize on their investments in imaging solutions, by utilizing images throughout the entire payment process. Capture, data entry, returns processing, exception item processing, clearing and settlement are all more efficient when images are used versus the paper," Kurtz said.

Many industry watchers believe that the Act, which could pass in 2003, may spur some financial institutions to invest in check imaging technology at the ATM and to link their back-office check processing operations with their ATMs.

(See related story Improving ATM deposits)

WFS plans to make a similar pilot program available to private remittance processors, which will allow them to implement IRD and Check Image Exchange capabilities either for the electronic presentment of all check volume or for only the check volume that currently cannot be processed under NACHA's ARC check conversion rules.

"While conversion of checks using ARC has grown substantially over the last couple of years, not all items can be processed through ARC nor are all customers comfortable with converting their checks using ARC," said Mike Tallitsch, product line manager of remittance solutions at WFS, in the release.

"This pilot will allow remittance customers to electronically send all non-ARC items using image exchange or Image Replacement Documents, further increasing the efficiencies of processing checks. This new technology also will position remittance processors to take advantage of the Checks 21 legislative changes expected in 2003."

As part of the pilot, remittance processors will be able to electronically exchange check images with banks participating in the forward presentment pilot. ZMSC's NetDeposit will facilitate the electronic exchange for participants of both pilots, according to the release.

WFS also plans to use NetDeposit's capabilities to clear and print demand drafts created if an ARC item is returned. NetDeposit will clear demand drafts by printing them at print centers located throughout the U.S., which will expedite the payments of the demand drafts as well as reduce the costs of transporting demand drafts to the paying banks.