Texas Commerce offers anti-fraud service for small business.

Texas Commerce Bank is offering a service meant to help small businesses using personal computers prevent check fraud.

The program, which the bank calls Checkmate, was developed by BankLink Inc., a subsidiary of Chemical Banking Corp., which is also Texas Commerce's parent company.

Approximately 20 customers have signed up and will be using the system in the next two weeks, reported Ann W. Johnson, vice president, information reporting product manager. Bank officials anticipate having 1,500 customers on the system by the end of the year, she said.

Texas Commerce's large corporate customers already send daily lists of issued checks directly from their mainframes to the bank's mainframe, said Ms. Johnson. But small customers that do not have the capability to make mainframe transmissions needed a way to send issued check information to the bank as well, which is why the product was developed, she said.

How It Works

Checkmate works by flagging potentially fraudulent checks.

Corporate customers create a Checkmate file containing the numbers and amounts of checks written that day. This information is keyed in manually, or, if the customer is using a check writing system, can be imported into Checkmate.

The files are then sent to BankLink's central computer.

BankLink merges all the files sent by businesses into one large file that Texas Commerce can upload. Each day at 5 p.m., the bank pulls the file from BankLink's computer and imports the information into its account reconciliation program.

As the actual checks come into the bank for payment, the bank creates a log that is compared against the information received earlier from corporate customers. The reconciliation system generates a report of items that don't match. If a check comes in and is not on the issued file, the bank calls the customer for verification.

500 Million Forged Checks

Customers can inquire about checks by account number, date or date range, status, and check number. BankLink maintains check historical information for a maximum of 63 days.

"The importance of [the product] is clear when you consider what banks are up against," said Creed Terry, chairman of BankLink. "It's estimated that more than 500 million checks are forged each year in this country alone, costing businesses upwards of $10 billion a year, and banks over $1 billion."

Texas Commerce, based in Houston, had assets of $22 billion as of the third quarter of 1993.

BankLink, based in New York, provides services to the financial industry, including account reporting, funds transfer, disbursement, and collection.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER