SCHENECTADY, N.Y. - BankServ, a San Francisco payments software developer, said it will conduct a 90-day test starting next month with Price Chopper, a supermarket chain, that would let the retailer convert checks written at the point of sale into electronic payments.

The test would be the first electronic check conversion program undertaken by a large U.S. grocery chain, BankServ officials said.

The testing is to begin at a Price Chopper store in Dunmore, Pa. The retailer operates 97 supermarkets in Connecticut, Massachusetts, New Hampshire, New York, Pennsylvania, and Vermont.

If the test goes as expected, Price Chopper plans to install digital imaging check readers from Hypercom Corp. and BankServ's check conversion software in all its stores, beginning next January.

BankServ officials said the software, which converts checks into automated clearing house payments, makes unnecessary the most basic and costly paper check tasks: handling and transporting them. It also gives merchants faster funds availability and quicker notices of returned items, they said.

From 15 billion to 18 billion checks are written per year at the point of sale, according to banking industry estimates.

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