Checking Re-presentment

Checks stamped with “NSF” — non-sufficient funds — can make any retailer reach for the antacids. Those three letters generally signal the beginning of the time-consuming and costly check collection process.

RDM has added a new functionality to its suite of payment-processing products that makes this process more “intelligent” by providing greater power over check re-presentment and associated costs. Now, retailers have the option of deciding what action they would like to take with returned checks — and when.

Headquartered in Waterloo, Ontario, RDM develops specialized software and hardware products for electronic payment processing. The company was a pioneer in electronic check conversion systems and web-based image and transaction management services, and check re-presentment is a new functionality of its ITMS WebClient and Simply Deposit products, says vice president of marketing and product management Michael J. Murphy. The upshot: retailers now have some say in the re-presentment process.

For example, Murphy says, “if a regular customer in good standing passes a bad check, the retailer may decide not to re-present the check.” Checks with a face value less than the bank charge also do not have to be re-submitted. “It is the retailer’s choice.” Merchants also have control over when checks are re-presented, such as nearer to the customer’s payday to increase the chances of collection.

According to the 2008 FDIC Study of Bank Overdraft Programs, 41 percent of all reported NSF transactions took place at point of sale, with checks accounting for 30.2 percent of all such transactions. Statistics show that some 1 percent of all checks presented for payment to a bank are returned, most often due to insufficient funds.

As the check’s recipient, the retailer must contact the check-writer directly for alternative payment. With RDM’s intelligent re-presentment capability, “retailers can re-submit checks electronically,” Murphy says.

Saving time and money
Savings vary according to the retailer’s specific business and relationship with its bank, but “if you have a $15 to $20 NSF fee with every returned check, this solution can be a great cost savings,” Murphy says.

The intelligent re-presentment feature, which debuted last summer, is part of RDM’s suite of remote deposit capture products and services that were developed to save retailers the time and transportation expenses of physically depositing checks at their financial institutions, as well as to make funds available faster. Murphy believes this added functionality will appeal to retailers for the same reasons they choose remote deposit capture: convenience, speed and lower check-processing costs.

ITMS (Image & Transaction Management System) WebClient is RDM’s browser-based payment-processing platform, and allows electronic deposit of payments received by paper checks. The company’s suite of products includes: Simply Deposit check payment processing, geared for small business; Synergy Deposit, which will perform remote deposit capture as well as debit and credit; and Simply Deposit Mobile, which allows use of remote deposit capture using a smartphone.

Many of RDM’s customers are leading U.S. financial institutions. “We sell the suite to banks, which then resell it to their customers,” Murphy says. “The suite is private label and is branded with the bank’s name. Many customers may be using our products and not know it.”