The National Automated Clearing House Association has approved a rule for converting checks written at the point of sale into electronic debit items.

The rule, set to take effect Sept. 15, 2000, could apply to the estimated 15 billion items written annually at merchant checkout lines, about 25% of all checks processed.

It would allow for the scanning of checks through electronic readers to capture information encoded in magnetic ink characters. Merchants would return the voided checks to their writers after they sign authorizations for electronic funds transfers.

Electronic check conversion has been extensively tested in the last four years under Nacha guidelines. Findings from participating vendors such as Deluxe Corp. and First Data Corp. show consumers are receptive and merchants like the fraud and cost reductions associated with faster collection of funds.

"We hope this new rule will lay the foundation for other payment networks, including the regional EFT networks and the card companies, to process these types of transactions," said Harold Piotrowski, vice president of Charter One Financial Corp. of Cleveland and the chairman of Nacha.

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