With point of sale conversion of checks to electronic debits expected to almost double this year, First-Citizens Bank and Trust Co. of Raleigh, N.C., decided it wanted a piece of the action.

On Monday the unit of $11.15 billion-asset First Citizens BancShares said its T-Tech subsidiary had started marketing electronic check conversion software to small and midsize banks.

Charlotte-based T-Tech, formed in September, has been marketing for about a month. It already has two customers - First-Citizens and the unrelated First Citizens Bank of Columbia, S.C., a subsidiary of First Citizens Bancorporation of South Carolina.

The North Carolina bank formed T-Tech to develop the software, judging that electronic check conversion "fit nicely into banks' core competencies," said Wiley Tillett, T-Tech's president.

The appeal of electronic conversion has not been lost on big banks either. In September seven big institutions, including the merchant services divisions of Chase Manhattan Bank, Wells Fargo & Co., and FleetBoston Financial Corp., agreed to offer electronic check conversion services to their merchant customers through TeleCheck, a division of Atlanta-based First Data Corp.

Electronic check conversions are expected to nearly double to 60 million this year, according to Nacha, the electronic payments association. The method uses the automated clearing house system to convert paper checks collected at the point of sale into electronic debits.

When consumers present merchants with a check, the merchant runs the check through an electronic reader, capturing its bank account information. The voided paper check is returned to the consumer along with a receipt for the transaction. The funds are then collected electronically and directly deposited into the merchant's checking account.

Banks do not have to deal with paper; consumers benefit from increased security, and merchants collect payments faster, receive automated daily tallies, and avoid frequent trips to the bank.

"It is the earliest point possible to truncate checks," said Mr. Tillett, who used to be the senior vice president for electronic commerce at First-Citizens. "That's the best place to truncate."

Six retail merchants have been signed - five of them by T-Tech's parent company, which has 359 branches in North Carolina, Virginia, and West Virginia - to use T-Tech's software.

Unlike other electronic check conversion providers like Houston-based TeleCheck Services Inc. and San Francisco-based BankServ, T-Tech does not market its service directly to retail merchants, but relies on its bank customers to sign up merchants.

The noncompetitive approach is a good strategy, said Bill Nelson, executive director of Nacha. "Banks don't like to buy product from another bank if the subsidiary of that bank is out there is taking way your business," he said. "This is not a competitive threat to the banks."

Another advantage is that T-Tech does not "have to hire a bunch of salespeople calling on retailers across the country," he said. "You can have the banks do that."

Steve Ledford, managing principal at Global Concepts, an Atlanta-based consulting firm, said check conversion is a "moderately complex service to offer," but "is not out of reach for a bank determined to do it. These ancillary business can sometimes become a significant portion of the holding company's revenue."

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