Deluxe Corp.'s bid to buy E-Funds Corp. will result in a greater push to market check-truncation services to banks and merchants, officials said.

Terms of the cash deal, announced Wednesday, were not disclosed. Deluxe stock closed last week at $35.625, unchanged.

E-Funds' software for converting checks at retail locations into automated clearing house transactions would complement Deluxe's check verification and authorization services. Deluxe processed three billion transactions at the point of sale last year.

"We felt that the significance of the technology and Deluxe's accelerating role in the payments business was strong enough that we needed to go ahead and make the acquisition," said Kimball Anderson, senior group product manager at Deluxe of St. Paul.

Officials at both companies said the greater emphasis on check truncation would let customers benefit from electronics, even as America's love affair with the check continues.

"The irony is that this does not get rid of the check," said Neil Godfrey, founder and chief executive officer of E-Funds, Tustin, Calif.

Heather Bellini, analyst at Lehman Brothers, said the deal is an attempt by Deluxe to diversify. It derived 77% of its revenues last year from check printing. Its 1998 revenues were $1.93 billion, up 6% from the previous year.

The company expects earnings growth of 11% to 15% in the next two years, "which is great for a mature company, but the problem is that it is all coming from cost savings," Ms. Bellini said.

"At some point, you can't cut your infrastructure any more."

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