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What Back–Office Conversion Means to You
BOC will affect financial institutions, consumers, small businesses and retailers in different ways. Some financial institutions and retailers will implement BOC right away, while others may choose to continue to use existing electronic check processing methods like accounts receivable conversions (ARC) and point-of-purchase (POP) methods. Below are additional impacts.
For Financial Institutions
For those organizations that enable this capability, BOC may impact nearly every aspect of daily operations for financial institutions, including consumer service, call volume, employee education and training, internal check processing and destruction, and product and sales opportunities.
- BOC may increase operational efficiency by reducing time and resources needed to process check payments. The cost of accepting, processing and handling paper checks ranges from $.75 to $3 per check. For electronic checks, this cost decreases to a range of $.32 to $.70 per check.
- BOC streamlines the processing of paper checks, resulting in fewer incorrect business check conversions, and saving time spent correcting errors and managing related inquiries.
- Changes in check conversion will affect the internal operations and fraud prevention processes, like Positive Pay, to incorporate the new types of check conversion.
- Additional training will be required for consumer service and front-line employees. Financial institutions should anticipate a higher–than–normal call volume with questions related to individual transactions, consumer and business periodic account statements, and general questions related to check conversion.
- Financial institutions can expect an increase in inquiries related to business-size and consumer checks and related products that allow them to opt out of conversion.
For Consumers
Unlike other electronic check processing methods, BOC has little impact on consumer experiences:
- BOC does not fundamentally change the existing experience in using checks at the register. There is no additional delay in the checkout process.
- Checks that have been converted to electronic transactions will appear as brief descriptions, including the transaction date and amount, biller information and check serial number.
- While BOC does not directly impact the amount of time it takes for a check to be deposited and appear on financial statements, it is possible that funds will be withdrawn more quickly due to existing check conversion methods.
For Businesses
The changes in check processing will affect financial statements, experiences at the register and overall consumer processes for businesses:
- BOC will give businesses an additional option when choosing how they convert checks and how their own checks are converted.
- Businesses that use personal size checks may choose to upgrade to a business size document that contains an auxiliary on–us field to avoid conversion and maintain their existing account reconciliation practices.
- Checks that have been converted to electronic transactions will appear as brief descriptions, including the transaction date and amount, biller information and check serial number.
For Retailers
Retailers who elect to implement BOC will notice differences in nearly every aspect of the check process, including acceptance, processing and storage, in addition to consumer service, and employee education and training:
- BOC streamlines electronic check processing methods by allowing most consumer and business checks to be processed in the back office. The new rules make it easier to continue to accept checks and implement the new exception rules.
- By allowing checks to be processed in the back office, BOC will reduce register procedures and increase efficiency and speed at checkout lanes.
- BOC does not require the capital expenditure of installing scanning equipment at every register. Only one unit needs to be installed in the back office of each store.
- Retailers and billers that intend to back–office convert paper checks must post a sign at the point–of–sale and note their intent on paper handouts distributed to consumers. These signs must include a customer service phone number, established to address consumer questions and concerns regarding BOC.
- BOC requires retailers or third–party processors to securely destroy paper checks converted in the back office. There is no required timeline for this destruction.
For additional information regarding the ways BOC will impact financial institutions and their consumers, visit Tools and Resources.
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