International Business Machines Corp., trying to give banks another reason to buy its multimillion-dollar system for check imaging, has agreed to integrate another manufacturer's check encoder, which runs much faster than IBM's.

The agreement with the manufacturer, Dallas-based Recognition International Inc., is the first the computer giant has made to incorporate another vendor's check processing equipment into IBM'S system.

Banks using IBM'S ImagePlus High Performance Transaction System Banks, known as HPTS, must now use IBM'S 3892 check encoders with it. But IBM plans to create by yearend an interface that will enable banks to use Recognition's Modular Reader Sorter/Power Encoding Transport, called MRS/PET.

Up to Twice as Fast

The IBM 3892 can encode up to 500 checks per minute. Recognition's new line of machines can encode between 600 and 1,000 checks per minute, according Recognition officials. They said these machines will be available by early next year.

IBM believes that the Recognition's encoder will be the fastest on the market, said Dave Halvorsen, marketing manager with IBM'S Document and Check Image Solutions subsidiary in Charlotte, N.C.

"Customers have been asking us for a long time to open up our platform and cooperate with other suppliers so they can mix and match devices and improve their business case for image," Mr. Halvorsen said

Linked Equipment

"Obviously, if the [Recognition) power encoder runs twice as fast as the one we market, we improve their business case," he added.

The IBM system consists of check sorting and encoding equipment -- computers and software that enable banks to take pictures of checks as they are sorted and balanced and to print the check images on letter-size pieces of paper inserted into monthly bank statements.

These so-called image statements are supposed to be easier for consumers to handle and cheaper for banks to mail than traditional bank statements that include original checks.

The IBM system also has software that enables computers to read the dollar amount written on a check and automatically encode that amount onto the check without human intervention.

This "proof of deposit" feature and other related functions are intended to improve the productivity of data entry workers in check processing units.

Customer Lineup

About a dozen institutions, including Fleet Financial Group Inc. of Providence, R.I., and First Tennessee Bank of Memphis now use IBM'S system to create image statements.

A handful of institutions, including Mellon Bank Corp. of Pittsburgh, are now testing the proof-of-deposit technology, Mr. Halvorsen said.

Other vendors of check imaging systems include Banctec Inc., Dallas; Unisys Corp., Blue Bell, Pa.; and Dayton, Ohio-based NCR Corp., a subsidiary of American Telephone and Telegraph Co.

Similar Cost

The Recognition encoder costs about the same as IBM's,

A fully configured IBM 3892 costs between $300,00 and $325,000, Mr. Halvorsen said.

Recognition's MRS/PET encoders range in cost from $200,000 to more than $400,000, according to configuration, said Fred Zucker, president of Recognition's systems division.

Check encoders are among the most expensive equipment check processing center. banks may install from one to 20 in typical installations, Mr. Zucker said.

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