BB&T Corp.'s test of check truncation at the point of sale is going smoothly, with neither merchants nor consumers balking at the changes involved, executives involved in the project say.

Since Jan. 24 checks written to certain merchants against consumer accounts at BB&T, of Winston-Salem, N.C., have been converted at the point of sale to real-time debit payments, and the checks have been returned directly to the consumers.

Each participating merchant has a terminal from Small Value Payments Co. of New York that scans the check's MICR line, makes the conversion to an electronic debit payment, and cancels the check.

The transactions are being routed through the Star Systems Inc. network, the largest electronic funds transfer network in the country.

The truncation test "seems to be working well," said Hank Farrar, president and chief executive officer of Small Value Payments Co., also known as SVPCo. "We've proven we can do it, and that in itself is an historical event."

Mr. Farrar said he could not say precisely how many merchants are testing what his company calls SafeCheck technology, but he said he hopes to enroll more merchants this month. He characterized consumer reaction as "neutral."

"They haven't said this is the greatest thing we've done or the dumbest thing we've done."

When transactions are converted to real-time debit, consumers who pay by check lose the two-to-three-day float they would normally get while the check is being processed. But merchants benefit because they do not have to pay for check processing.

Greg Adelson, executive vice president of International Check Services, a processing/verification company participating in the pilot, said point of sale check truncation "can eliminate a lot of fraud and cut merchants' costs" and "is going to be an important product for everybody."

The Riverdale, N.J., company has been routing a few hundred BB&T checks a day through Star, and "there hasn't been one hitch," Mr. Adelson said.

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