A patented electronic check deposit system from Huntington Bancshares should have banks and their largest customers salivating over the efficiencies it says will be gained from streamlining the process.
The Huntington's Electronic Check Deposit (ECD) system enables companies with large remittance volumes-500,000 per month, minimum-to act as a remote check processing center of The Huntington by sorting, endorsing, filming and then sending the checks electronically into the clearing system on behalf of The Huntington. At the same time, merchants transmit an electronic file containing MICR line data, item counts and totals to the bank, which deposits them into the merchant's account. "What we will gain is a less redundant processing system," says Terry Geer, svp of Huntington Treasury Management Company.
The Huntington is also offering the product and project management to other banks and financial institutions, Geer says, because, "not everybody is going to bank with The Huntington, but this is a product...we think would be a good one for other banks to offer."
The licensing fee will depend on the size of the institution and the volume of checks processed, but will be less than one cent per check, Geer says. And what do banks have to gain? The Huntington estimates banks will be able to save between one and two cents per check processed.
The system requires merchants to have processing hardware equivalent to what banks use and adds steps to their usual check-deposit processing. It offers three main benefits: Increased control over deposits, lower per- item clearing costs and reduced float by as much as a day.
EDS has been using the system to process payments for one of its clients, a cooperative of 200 cable television companies. Marketing manager David Hunt says the ECD system has allowed the co-op to lower its processing costs from between 50 cents and $1 per item to a blended cost of about 12 cents each. "This is the only way realistically that we could provide a lock box type of service for this cooperative," Hunt says, adding, "We're hoping (that) its going to get to the point where it's a more competitive product for any customer of ours that has a large deposit volume."