Market Consolidation Predicted

By Mark Brousseau

Watch for more lockbox market share consolidation this year as declining check volumes put an even greater strain on lockbox service providers, in-house remittance operations and lockbox solutions vendors alike. That’s according to Serena Smith (serena.smith@fnis.com), senior vice president, Remittance Processing Division, at Fidelity National Information Services.

“We’re all keenly aware of declining check volumes and the issues this presents. As a result, I believe we are going to see even more acquisitions, more consolidations and more companies moving into new markets,” Smith told me, adding that Fidelity expects an increase in the number of banks and billers looking to outsource their remittance processing. “Every processor, whether it’s an in-house operation or an outsource provider, is feeling the decline in check payments, in terms of higher unit costs and equipment maintenance fees,” Smith said. “As part of this trend, more lockbox providers will look to offer additional services to replace their lost check volumes – such as healthcare payment processing – and add technologies to try and capture some of the ‘new’ electronic payments volumes.”

Which brings us to the trends in technology that Smith foresees in 2008. She says more corporate billers will require their lockbox providers to deliver a consolidated view of the transactions handled on their behalf – regardless of whether they were paper or electronic – and to provide a check image exchange file to, or for, their corporate clients.

What do you think? E-mail me at m_brousseau@msn.com.