Remote Electronic Check Processing

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• Remote Electronic Check Processing

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Solutions website
http//www.square-9.com/solutions

• What it is?
• How it works?
• Key selling points
• Barriers to sale
• Competition
• Types of applications
• Collateral

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What is Check21?

• The Check 21 Act, which is also known as the
  Check Clearing for the 21st Century Act, went
  into effect in October 2004.
• It requires financial institutions to accept and
  be able to process Image Replacement Documents
  (IRDs). The law is intended to encourage the use
  of imaging technology to process and clear checks
• Best-of-breed, end-to-end, client/server solution
  for electronic check processing
• Check21 is a solution for ANY customer looking to
  process checks electronically

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Key terms

• ICL Image Cash Letter
• Front and back of check along with data file
  compressed into a file. A single ICL can contain
  multiple checks
• ECL Electronic Cash letter
• No check images only data
• X9.37
• X9.37 is an electronic file specification that
  was developed to support the Check 21 Act and is
  the industry standard for electronic check
  exchange
• MICR - Magnetic Ink Character Recognition
• Magnetic ink based number at bottom of check.
  Typically contains account and routing number
• CAR/LAR Courtesy Amount/Legal Amount
  Recognition
• Reads the handwritten or digital amount from check

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Common questions

• What types of checks does Check21 support?
• All checks, except foreign checks, including the
  following
• Consumer checks
• Business checks
• Corporate checks
• Government warrants
• U.S. Treasury checks
• Money orders
• Travelers checks
• Has Check21 been certified by the Federal Reserve
  Bank (FRB) to be a Check 21-compliant system?
• No. The FRB does not certify software or software
  vendors.
• Instead, financial institutions that want to
  establish an image exchange agreement with the
  FRB must go through a certification process
• Does Check21 support direct exchange with the
  Federal Reserve?
• Yes. Check21 from Square 9 can output a X9.37
  file that meets the Federal Reserve requirements
  and inherently supports FedForward transmission
• Does your solution support returns?
• Yes, our Check21 solution supports FedReturn as
  well as it can import x9.37 files

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Check21 Target Market

• Non-profit associations like Cancer, Heart and
  Lung large events with lots of checks
• Archdiocese - donations
• Property management
• Credit unions
• Banks
• Thrifts or savings banks
• Factoring companies
• Utilities
• Municipalities tax assessor
• Brokerage
• Insurance
• Financial Services
• Retail
• Manufacturing
• Hospitals and healthcare facilities
• 3rd party healthcare billing
• Any company that receives a large amount of checks

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Key points - banks

• The Fed as of January 1, 2008 has raised fees for
  processing of paper checks and has decreased fees
  for electronic deposits
• Reduce manual balancing
• Eliminate transportation and courier expense
• Accept customer deposits electronically
• Expand customer base nationwide
• Offer Check21 solution for sale to merchant
  accounts
• Eliminate MICR encoding and proof machines
• Reduce sorter maintenance expense
• Reduce insurance expense
• Check21 solution integrated with document
  management Fortis and SmartSearch

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Key points - merchant

• Reduce float, get interest on monies quicker -
  99 funds availability for cash letters
• Streamline and control cash
• Integrate processing into cash management and AP
  software
• Reduce trips to bank
• Reduce need to manual balance
• Eliminate MICR encoding and proof machines
• Reduce sorter maintenance expense
• Reduce insurance expense
• Check21 solution integrated with document
  management Fortis and SmartSearch

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Bank check21 vs square 9 check21

• Some banks do offer Check21 services
• Typically web based very simple check scan
  capabilities
• No AP system integration in real time
• Storage of check images and data
• Check data extraction is limited
• Square 9 Check21 can extract
• MICR
• CAR/LAR
• Data mining name, address, telephone, SSN,
  drivers license, etc
• Remittance processing
• Remittance constrained handwriting, bar codes
• Check stubs extracting invoice numbers

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Check21 Cost justification

• Reduction of HARD Costs
• Reduce FLOAT
• Savings on items paid one day sooner (Source
  Global Concepts)
• 5 136 savings for 1 million check
• Transportation of paper items from branches to
  check clearinghouse (Superior Iron Range
  Community FCU - 2,000 per month)
• Eliminate manual check imagers and media costs
• Eliminate mailing of paper checks back to
  customer
• Reduction of SOFT Costs
• Streamline check processing procedures
• Employee per hour savings - no longer need to
  physically encode checks
• Retain image of check in archive disaster
  recovery, audit, etc.
• Control cash
• Three way matching of check with other stored
  content
• Line of business or core processing integration
  of check metadata

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Automated processing of check
CAR/LAR Retrieve the handwritten amount

• Data Mining Option
• -Intelligently retrieve data from top left of
  check
• Name
• Address
• Phone
• Drivers license
• SSN

• MICR
• Check scanner is designed to read the magnetic
  ink based MICR and parse the
• Account number
• Routing number

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Remittance processing

• Support for remittance processing
• Invoice stubs
• Loans
• Bank deposits
• Utility bills
• Property tax bills

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Easy-to-use Interface

• Automated corrections and balancing
• Red caution flags for invalid data reads
• Viewer window for front/back of check
• Data entry validation

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Check21 Supports

• Built-in CAR/LAR from A2iA
• Built-in x9.37 ICL and ECL (image/electronic cash
  letter) module
• Built-in FTPS upload transmission to BOFD
• MICR parsing
• Balance and corrections
• Research
• Data mining
• Remittance processing
• Image enablement of core bank processing systems
• Electronic endorsements
• Support for FedForward, FedReceipt and FedReturn

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Check Scanners Supported

• Deposit Express Check Scanners Supported
  Canono CR-25o CR-55o CR-180 Digital Check
  (Kodak)o Tellerscan (TS) 100o Tellerscan (TS)
  220Eo Tellerscan (TS) 215 RDM EC7000
  CheXpress 30

• C21 Express Check Scanners Supported Canono
  CR-25o CR-55o CR-180 Digital Check (Kodak)o
  Tellerscan (TS) 100o Tellerscan (TS) 220Eo
  Tellerscan (TS) 215 BankTec NCR Panini
  BUIC

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Check21 configurations

• Merchant Capture ONLY
• Deposit Express
• Simple scan, endorse, balance, correct and send
  to bank
• Merchant, Branch or Teller Capture
• C21 Express
• Robust solution includes all of the above plus
• Reporting
• Multi-ICL merge
• Support for FedForward, FedReceipt and FedReturn
• Add-on Options
• Remittance
• Data mining

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• For more information
• Brent Wesler
• VP of Business Development
• Office 1 203-789-8791 ext.119
• Mobile [phone]
• bwesler_at_square-9.com