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Electronic check truncation by financial institutions is moving out of the laboratory and into the marketplace as at least one financial institution now views electronic check processing as a permanent product line for the bank. First Hawaiian Bank of Honolulu is believed to be the first bank to put electronic check truncation at POS sites to a live test. The bank began a test of check truncation in February 1998 and the initial trial of processing checks at POS locations has ended. The bank has offered the service as a permanent program since last August.
And what started as a pilot program with only two merchants participating has now grown into a product offering with about 70 merchants signing on so far.
Before the First Hawaiian check truncation program, financial institutions have looked at electronic check processing with interest but have not taken the plunge, leaving non-financial institutions an open field to capture check processing services among the estimated 18 billion checks that are taken at POS locations, according to Scottsdale, Ariz.-based Primary Payment Systems Inc.
But banks are beginning to take notice. Besides the First Hawaiian program, Charlotte, N.C.-based First Union Corp. announced recently it was planning an electronic check truncation pilot program involving 20 locations of a hair-cutting chain.
The First Hawaiian service uses a check scanner...