Futurists look forward to a time when consumers can run their financial lives from home with the use of gee-whiz technologies made EZ-to-use.
For National Credit Management Corp. of Cockeysville, the gee-whiz technology is the telephone, and what could be "EZ-er" to use? The company has launched a service that allows merchants and other companies to accept checks over the telephone.
Accelerated Payment Systems (APS), a division of National Credit, announced yesterday a marketing agreement with a Washington state company that could put its systems in the hands of the nation's largest telemarketing firms.
National Credit signed an agreement with Digital Systems International Inc. of Redmond, Wash., a leading manufacturer and marketer of telephone dialing systems, primarily for telemarketers. The agreement gives Digital's customers the option of having the APS system pre-installed in the telephone systems.
With competitors such as Western Union believed to be moving into the business of automated bill-paying and check-processing, Accelerated Payment Systems is hoping that
yesterday's announcement will give it a head start in an increasingly competitive business.
At the heart of the new product, launched a year ago, is the ability of consumers to give approval over the telephone for checks be drawn on their account, just as people currently can authorize credit card purchases over the phone.
But for customers without the ability or desire to load up more high-cost debt on a credit card, the system saves time and money, according to National Credit's chairman and chief executive, Leeds Hackett.
The consumer is "delighted because he doesn't have to go to the bank, and it costs him nothing," Mr. Hackett said, not even the cost of a stamp.
For the company -- National Credit's clients -- it speeds up the purchase and forwards the customer's money quicker, he said. And it protects the company against the customer who promises to put the check in the mail, only to hang up the phone and change his mind.
The cost is an initial $1,795 for the software, a telephone modem and a day of training. Each check transaction costs the merchant $3.65, but the price falls beyond a certain volume of transactions.
Here's how it works: The consumer agrees to pay a debt, make a charitable contribution or purchase a product by check. Over the phone, she reads off both the check number and the string of numbers at the bottom left corner of the check. This string includes, among other things, the bank's identification number with the American Bankers Association. The company enters this information, plus the amount of the check, into its APS computer program, and then transmits it to National Credit via modem.
National's computer verifies that the consumer has given a valid bank ID number, then spits out a check on its laser printer and deposits it within four hours into the merchant's bank account (or express mails it to the client). The consumer receives a notice from National in a few days acknowledging the check was drawn, and then receives the canceled check in the next bank statement.
Starting in February 1992, National began using the APS system internally for its own bill collection services. By the end of last year it had processed 15,000 checks through the APS system. "What we found out in a very short period of time is that the consumers loved it," Mr. Hackett said.
So last fall, the company started marketing the APS system to its clients, including Hecht's, John Wanamaker and Woodward & Lothrop department stores, Cellular One, the Bank of America and USAir.
The reception has been strong: the number of checks processed has risen by 50 percent in each of the last three months. The company's revenues, meanwhile, have grown to $6 million a year, from the $4 million it earned in 1989, the year of the buyout. And the number of employees is up to 104, from 55 in the same period, Mr. Hackett said.