Research from the National Automated Clearing House Association says consumers are receptive to check truncation.
In truncation, merchants glean information from a check's magnetic ink line, then electronically send these data to a bank-sponsored middlemen, which convert them into ACH debit transactions.
The research, conducted for Nacha by Widener-Burrows & Associates, based in Annapolis, Md., was aimed at determining whether efforts to increase ACH traffic with truncation would arouse consumer resistance.
The Nacha findings are "good news for the banking and retail industries," said Thomas Patrick, a director of bank alliances at Telecheck Services Inc., a unit of First Data Corp.
"The research has shown that the consumer truncation hurdles aren't as high as we previously thought," he said.
Louise Clynes, a director of retail applications at Nacha, said Widener- Burrows placed the consumers participating in its study in eight groups of eight to 12 people segmented by geographic region, age, and wealth.
In general, the survey participants said they would be willing to participate in electronic check programs. Typically, the consumers wanted assurance that transaction receipts or monthly statements could be used as proof of payment.
Ms. Clynes said participants in the research understood the goal of Nacha's efforts and were not opposed to helping, as long as it created no significant hardship.
"If you take the check away and replace that with a detailed entry on the consumer's monthly statement, they will see that as a benefit," she said.
The research findings will be combined with the results of electronic check pilot programs to help inform "other parties in other industries that this is working," Ms. Clynes said.
Asked whether she thought the electronic check initiatives would achieve their goal of reducing the number of paper checks, she said, "It's not a matter of 'if,' it's a matter of 'when.'"
Nacha wants to convert the paper-based payment system to electronics and cut the total - now more than 60 billion - of checks written each year.
Despite efforts to replace paper checks - which are expensive to process and less desirable, from a risk perspective, than electronic transactions - their volume has been growing. Experts believe the number of checks could reach 70 billion in the year 2000.
Neil Godfrey, president of E-Funds Corp., an Irvine, Calif.-based check approval service for merchants, said one hurdle to widespread acceptance of electronic check programs is that participation by consumers is voluntary.
He also indicated that some consumers do not like the idea of losing their float. "A few people say, 'I don't like that - you get the money too fast,'" Mr. Godfrey said.
But he added that consumers are more comfortable with having the checks handed back to them at the point of sale.
