FEATURE - For Immediate Release

Contact: Bill Stephens
(323) 661-6109

RETURN CHECK HELPS PAYPOINT OFFER
TOTAL CHECK PRODUCT TO MERCHANTS

In this era of payment-by-plastic, checks remain a vital part of a retailer's business. To keep providing fresh and innovative payment products, PayPoint Electronic Payment Systems has developed a one-two check processing punch.

In 1998, the Los Angeles-based electronic payments processor successfully developed a positive check verification product for a supermarket chain called Check Advantage. But while the client is pleased with the product, PayPoint has had limited success marketing check authorization.

PayPoint marketers are smiling these days. PayPoint has just rolled out its new Return Check product, which it is offering in tandem with check authorization as a total check product.

The new total check offering helps retailers both quickly screen check writers and manage the process of collecting from bad check writers.

"We realized that to really sell a check authorization product you need to complement it with a check return offering," says PayPoint Sales VP Fred Coblentz. "A large retailer can build their own check return product. But that isn't an affordable option for most smaller chains."

"The addition of Return Check now gives us a complete check offering we feel is unique. We think this is an excellent product that can help us grow our check processing business."

PayPoint has long enjoyed success selling its debit, credit, electronic benefits transfer, and prepaid gift card products to large, select retailers. And in 1993, PayPoint began offering its customers access to national negative file data bases, which identify chronic bad check writers and closed accounts.

Check Advantage, PayPoint's more advanced "positive" check authorization product, is tailored to a retailer's business. Once a new customer tenders his or her ID at a store, that customer becomes part of the retailer's proprietary database. From then on, that customer doesn't have to show his or her ID to cash checks, which speeds purchases.

When a customer writes a check, Check Advantage quickly notes any check amount limits and how many checks that person has written. If Check Advantage refuses to authorize a check, the system offers the store manager an instant "mini-history" of the check writer at the point-of-sale.

Check Advantage helps the store manager improve check authorization decisions by distinguishing between different types of check writing customers, including the "check runner" (professional criminal who hits many stores in a few hours), and the "good bad check writer" (regular customer who inadvertently writes a bad check).

"The product makes it harder for check runners to victimize a retail chain," says PayPoint's Craig Richardson, one of the developers of the product. "And it allows retailers to authorize checks quickly for good customers."

PayPoint pilot-tested Check Advantage at a retail customer's 13 grocery stores. The result? Check Advantage transformed checks from a loss to a profit center. Check Advantage was recently rolled out to all the client's grocery stores. And already the product has dramatically cut the client's bad check losses.

"They are very happy with the product," says PayPoint Account Management Director Mike Nolan.

But PayPoint needed a complete check return product to sell check processing to many merchants. That's where PayPoint's new Return Check product comes in.

PayPoint software designer Terry Ellett began working on developing Return Check some 18 months ago. His assignment--create check return software to help PayPoint's retail customers collect on bad checks. "We did a lot of brainstorming about goals and possible features to offer," he says.

The new check return product, he says, had to: be easy for retailers to use; integrate seamlessly with the Check Advantage database; allow retailers to process returned checks; and provide retailers with flexibility to employ their own personalized method of doing check collection.

Working with other PayPoint software designers, Ellett designed the system, including user-friendly on-screen instructions. He created return check software that is housed on PayPoint servers and viewed from client PCs.

Return Check helps retailers efficiently manage their own bad check collection effort. When the retailer receives a bounced check from the bank, a clerk in the retailer's main office accesses the Return Check system by scanning the check. Right away, the information is sent to the Check Advantage database, which reads the information on the check and blocks the check writer from writing any more checks until the matter is resolved.

At the same time, Return Check gives the retailer access to a bad check management system, which prints out collection form letters and creates a log for tracking collection attempts.

"Return Check's contact tracker helps the retailer track phone contacts made with the person the retailer is trying to collect from," says Ellett. "The retailer ultimately decides whether to turn the matter over to a collection agency, take legal action or other appropriate steps."

Return Check, he adds, also helps management pinpoint which stores have serious bad check problems.

Recently, Pay Point's new complete check package, including Return Check, was rolled out to a new customer, grocery store chain Bristol Farms, three months ago.

"The fact that we offered this complete check product in addition to our core debit and credit card offerings, helped us land the Bristol Farms account," says Coblentz. "Few competitors do both check authorization and return check as well as we do."

Coblentz feels the new total check offering will give PayPoint a well-rounded product offering. First, it will help PayPoint grow its check business.

"Our new complete check offering allows us to tap a broader network of potential retailers interested in check processing support, including small chains," says Coblentz. "It will allow smaller chains to take advantage of a positive check authorization system similar to systems used by large national chains."

In addition, it will "help us get in the door to sell new retailers on our basic debit, credit, electronic benefits transfer, and prepaid gift card products.

"Our total check offering creates value for our retail customers," says Coblentz. "And it gives consumers convenience, security, and ultimately lower prices."

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2/20/2000