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One Bank's Journey to $500,000 in annual savings
How an industrial bank turned its payments from 90% paper to 90% electronic payment in a few years.
Merrick Bank is an industrial bank chartered in Utah. Its product is credit cards, and up until two years ago 90 percent of its payments were through paper or traditional lockbox methods. But through a combination of staff education, adjustment to strategic planning and awareness of leading edge technology, by 2005 the bank was processing 90 percent of its payments electronically through various types of ACH Standard Entry Class Codes (SECs).
"What helped were the rules changes that NACHA put in place," explained Travis Soto, Merrick Bank vice president and assistant treasurer. The bank now originates its own Internet-based WEB transactions via its online cardholder center. It also created and developed an in-house ACH-based telephone payment application that allows customer service and collection representatives the ability to take telephone payments over the phone and process them as TEL transactions. In late 2004, the bank, along with its lockbox vender, implemented ARC (Accounts Receivable Conversion) processing on the items received at the lockbox. In addition, the bank has also begun processing numerous commercial transactions or CCDs for its merchant-related credit card business.
The numbers speak for themselves, with alittle over 5 million ACH transactions in 2004, and over 25 million in 2005. That will put the Merrick Bank close to the NACHA top 30 ACH originators. "This represents tremendous growth and it is all...