-- CheckFree Financial Institution Clients Will Be Able To Leverage Positive
Pay To Deliver Fraud and Risk Reduction Benefits In Processing Corporate
Checks --
ATLANTA and SAN ANTONIO, April 11 /PRNewswire-FirstCall/ -- Payments 2005
Booth # 313 -- CheckFree Software, a division of CheckFree Corporation
(Nasdaq: CKFR), today introduced CheckFree e-Check Bridge(TM), a software
module that links two industry-leading bank operation solutions, CheckFree
PEP+(R) and CheckFree ARP/SMS(TM), to ensure that converted corporate checks
do not bypass the positive pay process. By comparing original check
information to the electronic transaction, e-Check Bridge mitigates risk and
bridges the gap between the Automated Clearing House (ACH) processing
platform, check reconcilement and positive pay fraud detection systems in
corporate check conversion.
The conversion of check-based consumer bill payments into ACH
transactions, also referred to as accounts receivable conversion (ARC), has
experienced unprecedented growth among all ACH transaction codes. In 2004,
1.25 billion ARC transactions were processed, representing 488 percent annual
growth, according to NACHA. While corporate checks are not eligible for
conversion under current ACH operating rules, many checks drawn off of
corporate accounts are physically similar to consumer bill payment checks.
Today, corporate checks are often inadvertently converted, and with
transaction volumes continuing to climb, the number of converted corporate
checks is projected to steadily increase.
"One of the reasons why business checks are excluded by ARC rules today is
that banks have developed value-added reconcilement and fraud detection
services around check processing for their treasury management customers.
Positive pay systems in the check environment provide a strong defense against
check fraud for corporations that disburse checks to consumers and
businesses," said Breffni McGuire, senior analyst in the Global Payments
practice at TowerGroup. "However business checks that are electronically
converted to ACH transactions may bypass these protections, reducing the
benefits of automation and increasing risk exposure for both banks and their
corporate customers. A bridge between the ACH and check processing systems
resolves the problem for checks that have been inadvertently converted to ACH
items and provides a technical resolution should NACHA rules be amended to
allow conversion of business checks."
"To accommodate check conversion for corporate items, Wachovia needed to
deploy a solution that could blend our electronic transactions and paper check
processes while maintaining the high level of information, fraud protection,
and systems integration our clients expect," said Suzy Yoder, senior vice
president of Integrated Disbursements at Wachovia Corporation. "CheckFree's e-
Check Bridge software was the right solution to help the bank mitigate risk
and meet our clients' demands."
Solving The Business-to-Business Check Conversion Challenge
CheckFree's expertise in reconciliation and positive pay enabled the
company to design a module that easily integrates into financial institutions'
systems, and provides integration between CheckFree PEP+ and CheckFree
ARP/SMS. This solution blends the ACH and ARP processes and offers the
following benefits:
- Reducing risk exposure - e-Check Bridge enables financial institutions
to tie together Automated Clearing House (ACH) processing platforms
with check reconcilement and positive pay fraud detection systems to
address industry-wide banking and corporate concerns over corporate
check conversion.
- Automating positive pay, exception management and reporting -
Converting checks to electronic transactions can generate a significant
number of exceptions that need to be manually reconciled. With e-Check
Bridge, converted transactions are easily identified and automatically
matched to the check issue information on file. Suspect items can then
be sent to companies for their approval.
- Improving reconciliation - With e-Check Bridge, electronic checks are
uniquely identified in CheckFree ARP/SMS, enabling the bank to provide
companies with an accurate statement of their account status and
position.
"CheckFree's bank customers needed a comprehensive solution to bridge the
original check information with the electronic transaction and positive pay
safeguards," said Randy McCoy, EVP of CheckFree Software. "With our
reconciliation, risk mitigation and positive pay expertise, we created an end-
to-end solution by linking CheckFree PEP+ and CheckFree ARP/SMS. This
integrated solution assists financial institutions in reducing operational
costs, reducing fraud exposure and creating efficiencies for their corporate
customers."
About CheckFree ( http://www.checkfreecorp.com )
Founded in 1981, CheckFree Corporation provides financial electronic
commerce services and products to organizations around the world. CheckFree
Electronic Commerce solutions enable thousands of financial services providers
and billers to offer their customers the convenience of receiving and paying
their household bills online or in person through retail outlets. CheckFree
Investment Services provides a broad range of investment management solutions
and outsourced services to thousands of financial services organizations,
which manage more than $900 billion in assets. CheckFree Software develops,
markets and supports software applications that are used by financial
institutions to process more than two-thirds of the 10 billion Automated
Clearing House transactions in the United States. The division also provides
reconciliation, financial messaging, compliance and electronic billing and
statement software to thousands of organizations across the globe.
Certain of CheckFree's statements in this press release are not purely
historical, and as such are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These include statements
regarding management's intentions, plans, beliefs, expectations or projections
of the future. Forward-looking statements involve risks and uncertainties,
including without limitation, the various risks inherent in CheckFree's
business, and other risks and uncertainties detailed from time to time in
CheckFree's periodic reports filed with the Securities and Exchange
Commission, including CheckFree's Annual Report on Form 10-K for the year
ended June 30, 2004 (filed September 3, 2004), Form 10-Q for the quarter ended
September 30, 2004 (filed November 9, 2004) and Form 10-Q for the quarter
ended December 31, 2004 (filed February 8, 2005). One or more of these factors
have affected, and could in the future affect CheckFree's business and
financial results in future periods, and could cause actual results to differ
materially from plans and projections. There can be no assurance that the
forward-looking statements made in this press release will prove to be
accurate, and issuance of such forward-looking statements should not be
regarded as a representation by CheckFree, or any other person, that the
objectives and plans of CheckFree will be achieved. All forward-looking
statements made in this press release are based on information presently
available to management, and CheckFree assumes no obligation to update any
forward-looking statements.
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