Lockbox, eLockbox, remote: Which payment processing method is right for your business?

Traditional lockbox, electronic lockbox and remote lockbox are all methods used by businesses to manage receivables and process payments. Each option offers unique advantages and disadvantages, so businesses may wonder which one is right for their needs. Let’s compare these three payment processing solutions to help understand which option may be best suited to your business requirements. Plus, explore key features of each service, their pros and cons, and insights into how businesses can choose the right payment processing solution for their specific circumstances.

Lockbox

Even in an increasingly digital world, there are still many who pay their bills either by check or through an electronic bill pay system that might actually convert those electronic payments to checks. These checks could be sent directly to a lockbox address or to the business, who then may send them to the lockbox themselves. When payments are received by the lockbox provider, they are opened and processed. This can involve depositing checks, verifying payment information and reconciling payment amounts. Once the payments are processed, the lockbox provider transfers the funds to the business' account. This often happens on a regular schedule, such as daily or weekly.

Best fit for traditional lockbox: Larger businesses and enterprises who process more than 2,500 transactions per month

eLockbox

When consumers make payments through their bank’s online bill pay system, those digital payments are often converted to physical checks that get sent to a lockbox or even their offices. This is where an electronic lockbox, or elockbox comes in. An elockbox allows these online consumer payments to be processed electronically through a secure online platform.

Best fit for elockbox: Companies wanting to speed up their payment processing timeline

Remote Lockbox

Rounding out the list, a remote lockbox solution uses the technology enabled by remote deposit capture to create a robust alternative or addition to traditional remittance processing. Remote lockbox allows you to accept check payments remotely and scan them with a remote deposit capture device so you can skip the trip to the bank or the shipment to the lockbox. If you already have a traditional lockbox solution, these scans are sent through the primary lockbox process, so reporting and exceptions for lockbox and RDC or remote lockbox can be conveniently reviewed in one place.

Best fit for remote lockbox: Businesses with smaller check volumes or businesses that want an additional, convenient way to process payments along with their traditional lockbox solution

Finding the best solution for your business

It's important to note that the pros and cons of each payment processing solution will depend on a range of factors, including the specific needs and preferences of each business. Businesses should carefully evaluate each option and consider which solution is best suited to their unique requirements.

The best solution for your business may be a combination of these options and, depending on your business’s payment processing needs, potentially all three of them. For example, by combining a remote lockbox with a traditional lockbox solution, a business will have increased payment processing flexibility and improved payment processing capacity. Adding an eLockbox solution, in addition, will then also speed up the cash application process for online banking payments, cutting down on day sales outstanding and helping your business have greater visibility on cash flow.

Still not sure which is right for you? We’d love to help. Learn more about these payment processing solutions and all of the other ways Deluxe can aid in the receivables process.