ECP Implementation Tips

By Mark Brousseau

Electronic check presentment (ECP) is becoming an increasingly important part of the lockbox services mix. With electronic clearing, billers can achieve significant benefits when processing their receivables through a lockbox, including reduced deposit fees, faster funds availability, improved collections, later deposit windows, and streamlined returns handling.

But like any other business process change, electronic clearing requires billers to consider the potential operations and customer service impact of implementing the technology, or they might find its benefits to be elusive. That’s according to Lesa Brooks, general manager, Data Capture Services, Western Region for CDS Global (lbrooks@cds-global.com). An early adopter of ECP, CDS Global electronically deposits checks to four major financial institutions on behalf of several dozen lockbox clients, Brooks recently told me.

The first consideration, Brooks said, is ensuring that the biller has the right banking partner. “Billers need to make sure that their bank is experienced with the process,” Brooks said. “Most of the larger banks have teams dedicated to implementing ECP projects. They have the process down pat, and their fees are usually much lower. But we have seen cases where clients have worked with a local bank that is unfamiliar with ECP and it has made the process more confusing. Local banks might also have higher fees since they are working a vacuum.”

And deposit fees are a key consideration, Brooks said. Billers should expect banks to pass along some of the internal cost savings they achieve from electronic clearing. “But fees for ACH conversion, on-us items, check image exchange, and substitute check printing are all over the board, so it’s a good idea to shop around. In general, ECP fees are coming down.”

Billers should also make sure that their lockbox provider is experienced with ECP, Brooks said. Billers need to determine whether their provider allows for the use of multiple banking partners; whether the lockbox provider can handle opt-outs for ACH conversion; and whether the lockbox provider can customize X9 files to allow the deposit record to be marked based on the type of deposit (Check 21, ARC, BOC). “If your lockbox provider isn’t experienced with ECP, and it doesn’t offer flexibility for managing the process, it can add a significant amount of time to development and testing, as well as higher upfront costs,” Brooks said.

Another consideration for billers is whether to use ACH conversion or just Check 21. Depending on the biller’s business, it can be a no-brainer (utilities) or more complicated (non-profits), Brooks said. Once the biller determines it will use ACH conversion, it must consider how to handle customer notification for ARC conversion. Billers must think through what to say (and get the necessary approvals), where to put it, and whether to include a toll-free number for opt-outs. They must also leave time for printing. “Finding the space in customer mailings to put ARC notifications has been the biggest implementation delay, hands down,” Brooks said. Since this notification needs to be made 30 days prior to going live, Brooks said this task should be near the top of a biller’s implementation project list.

Similarly, billers must plan to educate their customer support staff on ECP. “Consumers still have questions about whether their check was cashed,” Brooks said, noting that checks presented via ACH look different on a consumer’s bank statement. “This is an especially big issue for non-profits and direct mail companies.” Customer service reps must understand that converted items might appear in a different location on a consumer’s statement. “We’ve chased our tails researching whether an item was processed, only to discover that the consumer was not looking in the right place on their statement,” she said. As part of their customer service planning, billers should also think through returned item handling.

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