New Check-Imaging Solution Promising For POS VARs

With the cost of processing and handling those checks manually skyrocketing, vendors and solution providers are studying ways to streamline and automate the subsequent delivery and clearing process.

One solution comes from Oklahoma City-based Advanced Financial Solutions (AFS), which is preparing to market and sell a bundle that includes its ImageVision software and a miniscanner about to be released by Ambir Technology. Pricing for the bundle, which is being beta-tested, was still being determined at press time.

The Ambir hardware, which will tentatively be named the Model 660 scanner, scans checks and then creates a 600-dpi digital image that can be captured, processed and archived for data-mining purposes by the ImageVision software, said George Rees, product manager for the remittance processing division of AFS.

The ImageVision software works with Windows 2000 and Windows NT, and AFS plans to submit the software for Windows XP

Server certification.

"We have become a society of check writers when it comes to our buying habits," Rees said. "And the tragedy of 9/11 showed that there are inherent problems in a paper-based system, when checks cannot be delivered."

Under many current automation systems, check image processing tech-

nology at POP locations is used to scan coded information at the bottom of a check using magnetic ink character recognition (MICR). This coded information only provides the bank ID and the account number from which the funds are to be drawn. However, these current point-of-sale (POS) imaging systems virtually ignore another key part of each check,the signature,

Rees said.

Without an image showing that signature, merchants can have a harder time seeking restitution for bad or fraudulent checks down the road, he said.

"The current POP application that was designed by NACHA (National Automated Clearing House Association) calls for the merchant to scan the check, cancel the check and return the check to the consumer," Rees said. "Because the signature and the name and address data on the check are not captured, the opportunity for fraud is high."

AFS hopes its new system will help merchants sidestep this problem. It approached Ambir with its proposed bundle, even though executives at the Oak Brook, Ill.-based company hadn't thought of positioning the new scanner as a POS device.

"We envisioned our scanner as an alternative document scanner [for everything from photos and photo IDs to checks and business cards," said Ambir President Michael O'Leary.

But when AFS executives approached Ambir with their idea for a bundle of both companies' technologies to offer a complete check-imaging solution, O'Leary said he saw the possibilities. "The solution pairing AFS' ImageVision solution with our scanner will open new markets for us," O'Leary said. "The changes in the banking regulations in terms of check-image capture at the POP will make this solution bundle very popular."

Wal-Mart has successfully deployed and is currently using a POS imaging system where checks are scanned for transmission and the hard copies are kept on file, said Rees. But what does all of this mean for solution providers that focus on retail and POS applications?

"For solution providers, the opportunities are not just in the sale of the technology but also in the training that goes with it," Rees said. "The POS industry is always changing and progressing, and the solution providers who keep up with the changes not only in the POS field but also with the new banking regulations will be very successful."

For POS solution providers, the concept is intriguing, with one caveat.

"For our customer base, and for the banks, any image that is captured must include the MICR data on the bottom of the check," said Mike Kapp, vice president of marketing at POS-Data, a Gig Harbor, Wash.-based distributor and integrator of retail POS systems. "If the MICR data cannot be read, then the image is not that useful."

But if the MICR data is readable, POSData would consider adding the solution to its product offerings, Kapp said.

"If the image captured the necessary information, and the price of the solution was comparable or less than the current MICR technology, we would probably look very seriously at the solution," he said.