The Denver transaction processing giant First Data Corp. and Deluxe Corp. of St. Paul, the No. 1 check printer, will jointly offer a service to weed out crooked would-be customers when they try to open accounts.
Deluxe Detect "will answer two questions, in real time: Are you who you say you are and do I want to do business with you?" said Paul Finch, the chief executive of the First Data affiliate Primary Payments Systems Inc. in Scottsdale, Ariz.
The new service will be based on Primary Payments' Early Warning service, which checks the backgrounds of would-be customers and learns whether checks presented for deposit are good.
Primary Payment manages a set of shared databases that track 210 million checking accounts, based on information provided by its contributing banks. Executives of the company said in December they wanted to extend the company's services to a larger group of banks, to fight check fraud at smaller institutions.
Mr. Finch said Deluxe Detect will be able to spot fake names and people who open and close accounts frequently.
Deluxe will market the service, capitalizing on relationships with the more than 7,500 banks that are its customers, said Chuck Feltz, the president of Deluxe Financial Services.
Because these banks already use Deluxe to order checks when accounts are opened, they could easily use the new service to find out more about would-be customers, he said.
The Deluxe data network they use to order checks for customers will connect the banks to the Primary Payments system, which will process the data, Mr. Feltz said.
"The heavy lifting to set this up is done," he said. "The pipe is already there," he said.
Mr. Finch said the deal will give Primary Payments, which works with more than 30 of the biggest banks, access to a much larger customer base.
Mr. Feltz said Deluxe Detect will first be offered, starting in March, to Deluxe's big customers. It may take some months for the first users to get ready, he said, so no bank is likely to be using the service before June.
Mr. Finch said Deluxe Detect should reduce the number of fraudulent new accounts that must be closed; he would not estimate how sharp the reduction will be.
First Data has estimated that it can cost a bank as much as $1,600 to determine that a new customer is a criminal and shut down the account.
Banks will pay a per-inquiry fee to use Deluxe Detect. The executives would not discuss the fees or how the revenue would be split.
Mr. Feltz said the partnership is part of Deluxe's effort to diversify because demand for checks is declining.
"It's no secret we are trying to go beyond paper checks," he said. "Deluxe sees this relationship as a way to leverage our strong presence with financial institutions."
