AirNet Systems Inc., facing a steep decline in its check delivery business, has started to implement a tiered pricing system and charge bank clients a fee if they stop using its planes to transport canceled checks through certain cities.
"We spent a lot of time with our bank clients, talking about longevity and where do they need transportation the longest in their transition to image documents," said Bruce D. Parker, the company's chairman and chief executive. (AirNet planes also deliver American Banker.)
AirNet ranked U.S. cities by check volume and grouped them into four tiers. The new system applies lower fees to a group of 20 "core cities," which all have high check volume.
Banks that send checks to or from cities in the other tiers pay a surcharge set according to its cost to serve those cities, he said.
Banks that stop sending checks to or from the core cities will pay a "Weekday Core Support Fee" of 50% of the previous fee for such checks for as long as the bank sends any checks through AirNet, Mr. Parker said. Smaller fees apply for banks that stop sending checks to or from lower-tier cities.
The new rates are expected to be in place by January.
"For an individual bank or city, it might be more" expensive on a per-check basis, he said, but because the volume of shipped checks is falling sharply — by 25% in the last year — "their cost will be decreasing through this next year."
