point of sale.

Visa U.S.A., Wells Fargo & Co., and U.S. Bancorp have become the latest clients of Bankserv, buying software and data processing services that let merchants convert checks written at their points of sale into electronic payments.

The moves by companies of that stature signal a growing enthusiasm for streamlining retail transactions through a variation of check truncation that has won consumer acceptance in several trials, said David Kvederis, president and chief executive officer of San Francisco-based Bankserv.

First Union Corp. began electronic check conversions in March, using Bankserv's software for a service provided initially to 19 HairCuttery salons in the Creative Hairdressers Inc. chain.

There is an enormous momentum building across the country in the merchant base for check conversion, Mr. Kvederis said in an interview.

Merchants are interested in the technique because it simplifies the funds-collection process, officials say. Sales clerks scan checks into terminals at the checkout point, capturing the necessary account information. Consumers with their signatures authorize their accounts to be debited via automated clearing house transmissions.

The voided checks are handed back to the customers.

The National Automated Clearing House Association, which has approved rule changes to support check conversions, said the service is well regarded by the merchant community. Between 12,000 and 15,000 merchants are collecting check payments through the ACH network, up from to 6,000 a year ago.

Some 18 million checks are written annually at points of sale, according to the association known as Nacha.

Daniel C. Peltz, senior vice president of Wells Fargo, said nonbank processors have garnered much of the check conversion market in its early stages, along with other aspects of transaction servicing.

Staking its claim, San Francisco-based Wells intends to combine its service with electronic collection of returned checks and other cash management offerings such as information reporting and check verification and guarantee.

Wells has entered into a three-year, nonexclusive agreement with Bankserv to develop a comprehensive set of merchant payment services. The bank will start a pilot program with 10 merchants within a month, Mr. Peltz said.

Banks are recognizing that nonbanks are capitalizing on our inherent data base information, and the banks should be able to capitalize on their own data, Mr. Peltz said.

Visa confirmed that it too has entered into a relationship with Bankserv to develop a check conversion service for its member banks.

We are doing this in conjunction with several bank-acquirers and merchants,'' said Visa spokesman Sean Healy.

It would be an example of how we are looking to leverage our connectivity to banks, authorizations, and clearing and settling systems,'' he said, declining to discuss further details.

Visa's entry would be interesting, Mr. Kvederis said, because the card association would apply its credit card authorization and verification technologies to the ACH and checks.

He further noted that Visa has connections to most banks and merchants and could help banks get into the check guarantee business, which is ultimately where all these banks need to be to compete.

''I think Visa will lend its brand to help legitimize check conversions at the POS,'' Mr. Kvederis said.

A U.S. Bancorp official also confirmed plans to enter the check conversion business, but declined to discuss them further.

According to Nacha officials, Telecheck Services Inc. a Houston-based unit of First Data Corp., is adding 500 merchants a month for check conversion.

Deluxe Corp.'s e-Funds subsidiary also markets it directly to merchants, though it sells it through banks as well.

Both those organizations have worked with Nacha in several ongoing pilot programs. Other vendors that offer conversion services include Equifax Inc. and National Processing Co.

Bankers have expressed some concern that check conversions might cut into fee income from deposit services.

Others have questioned the need to invest in a system that may just be an interim step toward debit card payments.

Mr. Kvederis described the opportunity as double-edged: If they do not do it, they will lose out on their traditional business. If they do it, they not only save what they've got, they will open up new businesses for themselves.

Robert J. Schmitt, vice president at First Union, said he was heartened by the results after three months of operation, with conversion volume running into several thousand items a month.

First Union has sold the service to the Arlington County, Va., government for collecting wedding license fees, traffic fines, and taxes. ''We are very excited about it. We think it is working very well,'' Mr. Schmitt said.

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