Check 21 Creates New Opportunities for CheckCache™ Users

Generating a lot of interest at the MCTA’s 57th annual conference on local taxation and finance was the presentation on remote deposit capture. This class featured a panel of banking experts who discussed solutions and methods available for taking advantage of the Check Clearing for the 21st Century Act, more commonly known as Check 21. Check 21 went into effect as a law on October 28, 2004 and now the rules of banking have been extended to fully support the exchange of “substitute checks” between remittance processors and banks.

This is exciting news for Point Software’s CheckCache™ technology that was developed over three years ago, as it now provides an avenue to blend back office check processing with the banking industry. While the financial institutions also promote these concepts, they have yet to solve the back office needs to post these items. The banks’ positioning for this technology is similar to the early stages of lockbox wherein the deposits ultimately need to be posted to the receivable through some form of data bridge. CheckCache eliminates this duplication of efforts.

CheckCache also yields another key advantage in that it is a “bank neutral” solution. This lets municipal governments retain the bargaining power typically associated with selecting bank services. Point will work with any financial institution to produce and transmit Check 21-compliant check images. Customers are invited to contact Point to ensure both the banking
requirements and posting requirements are satisfied so that the development team may frame their office with a complete solution.

While electronic check handling is nothing new, Check 21 enables it to enter into the mainstream. This is because Check 21 does not have the shortcomings of other methods:

• MICR capture and ARC require the consent of the check writer (payee).
• MICR codes are subject to a variable form factor.
• Not all check types qualify for conversion under ARC, which handles transactions through the ACH network.

Check 21 support is just one of the features offered by CheckCache. Implementing CheckCache enables municipal tax collectors to process incoming checks, store and update payment information electronically, and capture check images as graphic files to permit permanent recall of checks from an in-house digital archive. Equally important, CheckCache is tightly integrated with TaxValues™ RevenueNET™ to generate an internal lockbox file for automated updating of the receivables system: however, CheckCache’s design permits it to be bridged to any collection product.