Magazine article American Banker

Deluxe to Market ACH Outsourcing Nationwide

Magazine article American Banker

Deluxe to Market ACH Outsourcing Nationwide

Article excerpt

Deluxe Electronic Payment Systems, a Phoenix-based unit of Deluxe Corp., has begun offering an outsourcing service for automated clearing house processing.

Banc One Corp. and First American National Bank, Nashville, have been testing the service for several months, and Deluxe is now prepared to sell it nationwide.

The climate for such a service is good. Automated clearing house transactions are on the rise, and banks of all sizes are growing increasingly receptive to farming out operations to specialists.

Leonard J. Heckwolf, vice president at Banc One, called the software in Deluxe's service "a potential breakthrough" in ACH technology.

The outsourcing service is part of an effort by Deluxe Corp. to diversify beyond check printing into businesses that have more growth potential. (Deluxe is the nation's leading check printer, and its electronic payments unit supports one of the few privat e-sector ACH operators.)

There are several factors working in favor of the new service. For starters, many banks feel the need to offer ACH services, and outsourcing can help smaller players to benefit from the economies of scale delivered by pooled transaction volumes.

But Deluxe's ACH service will not be without competition. Checkfree Corp. and Intranet Inc. sell ACH processing services, and several players, including Chase Manhattan Corp. and Norwest Corp., sell software that helps banks run their own processing.

The in-house option is sometimes attractive. …

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