BOC Picking Up Momentum

By Mark Brousseau

Although retailers were hesitant to adopt back office conversion (BOC) in its inaugural year, Barry J. Nordstrand (bnordstrand@solutran.com), president and CEO of Solutran, thinks the momentum for BOC is building as retailers are becoming more aware and better educated on the benefits that BOC can provide.

“Approximately 2 percent of US businesses have adopted BOC,” Nordstrand told me, adding that Celent projects the number of businesses utilizing BOC will reach the one million mark by 2009 and 5 million by 2012. “One reason for this projected growth is the fact that general awareness of BOC is increasing in the market.”

As an example, Nordstrand points to a case study recently presented at NACHA’s Payments 2008 conference in Las Vegas. Walgreen’s spoke about its success in implementing a Solutran deferred capture model and discussed its successes thus far. “As additional large retailers continue to deploy BOC as a check conversion alternative, others will be looking to follow,” Nordstrand explained.

“There are many reasons why retailers are considering implementing a BOC solution,” Nordstrand added. “BOC allows retailers to reduce costs without making any changes to the existing POS process. The checkout process is not impacted allowing consumers to get through the lane in an expedited manner. BOC also eliminates the need to provide additional training for a position that experiences high turnover.”

Nordstrand said these are all important issues for large retailers who understand that changes to the checkout process create unnecessary operational risks.

By converting check transactions to ACH debits, retailers are able to reduce their banking fees and processing costs, extend their deposit cutoff time frame, and eliminate trips to the bank while improving speed of returns and funds availability, he added. It also enables them to consolidate their banking relationships and establish a centralized account for checks.

“Having gotten off to a slow start, the increased market awareness and ability for retailers to study the success of early adopters will have BOC rolling in no time,” Nordstrand said.