Tackling a $96 Million Problem

Imagine a scenario in which there are thousands of individual businesses that are in the same industry, some of which are small mom and pop shops; others are giant Fortune 500 members. Periodic disputes ensue within this industry involving a client of one business having an issue with the client of another business, and the only way for these disputes to be resolved is for the two businesses to exchange non-public information about their clients. However, there is no secure system to which all of these businesses are connected so faxes become the only secure method that these thousands of businesses can communicate. The manual effort needed on either end to create, transmit, process, and remediate disputes seems nearly impossible to eliminate, plus there are operating rules governing the process with increasing fines for substantial non-compliance.

Now imagine that the above scenario is the U.S. banking system, the thousands of businesses are financial institutions (FIs), and the disputes are payment events. This is not describing a problem that occurred in the distant past but what is occurring today. Each of the thousands of FIs is advocating for its respective customers, so it’s not difficult to believe that the manual effort resolving these disputes represents at least $96 million of wasted money across the system per year—and that number only represents the cost associated with Automated Clearing House (ACH) disputes. If the cost for all payment disputes were similarly calculated, the annual number would be much, much higher.

Truly understanding the scope of this $96 million problem requires a grasp of the current process. Currently the process requires significant manual data entry, case research, and faxing information between parties as there is no central secure service for filing and managing payment disputes between receiving and originating financial institutions, as well as originating financial institutions and their originating companies. It’s hard to believe that this problem would even exist in 2020; why wouldn’t this have been solved many years ago? There are several barriers to a systemic solution to this problem:

Mail is too slow;

Email is not secure;

Secure email is secure but not all FIs use the same secure email system;

Any one entity can only create partial automation; but in order to fully automate, a system would have to be available to all FIs;

• One institution might be a large FI like JP Morgan Chase and the other party might be a $120 million community bank in central Texas

Based on the type and size of the FI, the functionality needed is dramatically different;
• Small FIs may need only one user access profile, a large FI may have dozens of users
• Small FIs would be fine with manually keying in a case, large FIs need automation on case creation

ACH transactions can be originated through multiple sources. There are two ACH clearing houses, the Federal Reserve and The Clearing House. Moreover, some FIs deliver ACH transactions in private exchanges. There is no single secure system that connects all ACH transactions regardless of how it was sent from or delivered to the FIs.

Some of the large originating deposit FIs and receiving deposit FIs (ODFIs and RDFIs) have achieved some cost reduction by automating pieces of the ACH dispute problem or moving manual dispute remediation elements offshore, but there are still two significant elements that ultimately must be manually addressed: 1) how to align requests and responses from FI to FI, and 2) how to align requests and responses from ODFIs and their originating companies.

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Combining Automation and Human-Driven Analysis to Keep More Payments Electronic

The postal delays and security concerns heightened in 2020 have further driven tens of millions of consumers across the U.S. to choose to pay homeowner’s association dues, tuition fees, trash bills, and other one-time or recurring payments to billers electronically instead of by check.

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CheckAlt Partnership Helps Address Potential $9.9 Billion Savings Via Healthcare Provider Claims Automation

Automation of paper claims-related business payments among U.S. healthcare providers—combined with adoption of electronic payment methods including online portals—has the potential to save providers at least $9.9 billion annually, as predicted by the 2019 CAQH Index report, which has identified increasing industry cost savings opportunities for three years in a row. To help healthcare providers realize this significant savings opportunity, CheckAlt recently enhanced its healthcare lockbox processing service by forming a strategic partnership with RMS to deliver leading revenue cycle management that uses automation to accelerate cash flow.

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CheckAlt Completes Significant Milestone with Release of CaptureNet Management 3.0

CheckAlt is delighted to announce the release of CaptureNet Management 3.0, the latest version of CheckAlt’s hub for all capture channels from ATM to branch to mobile device. Our IT Team has improved the overall performance and functionality of this product including single sign-on and private-label capabilities, multi-factor authentication, and customizable permissions—all presented within a fresh, streamlined web interface.

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Why Financial Institutions Are Thriving with CheckAlt's Solutions

At CheckAlt, I have the privilege of working as the relationship manager for banks of all sizes. Our goal is to make sure their payment processing and treasury management needs are met. One of the mid-sized financial institutions we serve recently told me that their business is booming—a sentiment I’ve heard from several of our clients.

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As Branches Close, Fintechs Can Help Financial Institutions with Digital Solutions

People are not visiting bank branches like they did before the pandemic, leading financial institutions of all sizes to consider speeding up plans for shutting branches down and scaling digital solutions.

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Learning Lockbox Lingo: What Is a Check and List Transaction?

As CheckAlt expands its online and card payments services in response to payments convergence, we remain known in the industry as a leading independent provider of lockbox services in the United States. Our network of 13 lockbox processing centers allows our customers to do business nationwide. In order to operate such a vast network, CheckAlt has attracted and retained a talented lockbox and treasury management team made up of individuals who know the ins and outs of this industry. In this article, we explore one of the lesser known lockbox payment types and how CheckAlt’s solution addresses its complexity.


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How the Right Software Solves ATM Woes for Banks and Credit Unions

While some ATM users associate the equipment as a relic of a past generation such as pay phones, ATM technology has evolved in exciting ways to support the needs of financial institution customers through lower costs and increased security. 

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CheckAlt's API Platform Enables Powerful End-to-End Banking Solutions

In this time of payments convergence when electronic is surpassing paper, application programming interfaces (APIs) are important and powerful mechanisms that can facilitate unified connectivity across a host of digital banking tools. Some banks are embracing APIs and open banking—a concept referring to using open APIs that allow third parties to develop inter-connectivity between data sources—while others are stuck delivering solutions in isolation from each other. Truly transformational services, like those provided by CheckAlt, are delivered in coordination, allowing banks to break away from operational bottlenecks.

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CheckAlt Grows in the Years After Klik, ERAS Acquisitions

When CheckAlt acquired ERAS from Diebold Nixdorf five years ago, the deal catapulted our mobile capture and electronic check processing business to new heights. ERAS provided us with the infrastructure to service banks at a larger scale with a full suite of item processing solutions, and since 2014 we have continued to invest in innovative, secure, and compliant technology.  

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How Validation Files Save Lockbox Clients Time and Money

Did you know that setting up a validation file with CheckAlt prevents rejections and manual repair of lockbox payments, thus improving cash flow and avoiding late fees?

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Simple Contracts, Easy Implementation, Always Available

Onerous contract agreements and inferior products are causing small banks to reconsider partnerships with banking technology core providers. That’s according to a recent article published in the Wall Street Journal. At CheckAlt, our priority is delivering the right products that are easy to implement, without difficult contract terms.

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How Property Management Can Adapt to Consumer Bill Pay Habits Without Hurting the Bottom Line

Examining today’s economy as a whole, 55-65 percent of bill payments are conducted online through a biller’s website. Electronic payments are the top choice among consumers, with paying by mail or in person becoming less frequently selected options. But when the economy is viewed by industry sector, it becomes clear that property management turns that trend on its head.

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Setting Up Lockbox Processing in as Little as 7 Days

In the payments processing industry, lockbox services providers can sometimes take months to set up and begin processing volumes of complex payments and remittance. When CheckAlt sets up a new lockbox client, it can take as little as seven days.

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Why Is CheckAlt Investing in Integrated Payables?

While CheckAlt remains firmly focused on developing the best in class integrated receivables (IR) solutions, we’re also making significant investments in the payables space by hiring Rob Snyder, formerly of Mastercard’s Commercial/New Payment Group. During his tenure, Snyder played a key role in driving Mastercard’s growth through the development of industry specific use cases for virtual credit cards.

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