How financial institutions can maximize the benefits of eLockbox with Deluxe

Despite continued decline in paper checks, it’s clear that they are always going to be part of the payments ecosystem. Paper checks present a variety of challenges for businesses customers, from mail float to fraud risks. An electronic lockbox (elockbox) solution eliminates paper check expenses by converting bill pay paper checks to electronic payments. This in turn helps improve and protect a business’s cash flow.

What sets electronic lockbox services from Deluxe apart?

“By leveraging our eLockbox solution, you’re able to alleviate many of those challenges, because you’re taking what was once paper and making it electronic,” said Layne Kight, senior product manager of digital solutions at Deluxe. “This gives you and your clients more efficiency and more scale. It also makes for a better relationship, a lasting relationship, because you’re providing so much more efficiency.”

Master consolidator

Deluxe’s electronic lockbox services stands out from competitors by capturing nearly 100% of all bill pay originators. These five payment originators include Fiserv CheckFree, FIS Metavante, MasterCard RPPS, Jack Henry IPAY and Payveris.

Through our eLockbox service, Kight said Deluxe goes through and registers a bank’s customers, or the bank as the biller, with every single one of the major bill pay consolidators. Each of these consolidators has a different directory that a business needs to be registered with, or they will continue to receive paper checks from those that are not registered.

Deluxe provides registration with all five major originators, while many competitive elockbox solutions only register with up to three. “We are able to capture that major five, which gives you about 100% conversion of those payments that are being made through only banks channels,” explained Kight. “Instead of receiving a paper check, you’ll receive an ACH transaction that will be received the next business day.”

These valuable time savings cut down the traditional challenge of mail float with paper checks. For example: If a payment is made at 4 p.m. on Day One, the bank or business customer will be able to see the payment in their account at the very beginning of the next business day (Day Two). 

Data correction tool

Once a business customer or bank is registered within a directory, they will begin to receive electronic transactions. These payments move through the eLockbox into an online processing “decision mode” queue where the biller can review the payment and make corrections as needed.

Oftentimes the biggest challenge with bill payments is that they will be sent with the wrong account number. When this happens, there is a lot of manual reconciliation and manual work that has to take place in order to find the proper account numbers. Deluxe’s eLockbox system allows the biller or customer to review and the change can be made one time within the system. The system will automatically apply the proper account number that was corrected and save it for all future uses. This means a reduction in manual exception and helps to accelerate your working capital by up to 5 days.

Businesses and financial institutions both benefit from a reduction in manual processes, especially when faced with AR teams already stretched for time and resources. “This is huge when you think of the ability to take some of your cash posting staff and your reconciliation staff and redirect them to some more value-added tasks,” added Kight. “You're able to get those funds much quicker because you're not having to do the manual research.”

Easy integration with existing components

When Deluxe eLockbox was created, the goal was to make sure that the solution could integrate with all of our existing components, including Deluxe lockbox archives. “You and your clients are able to see all of these transactions in one place, rather than having to go to many different systems to see them.”

Combined with the existing lockbox archives and data correction tool, eLockbox also helps influence better business decisions by providing a way for businesses to access the most accurate and current picture of the cash application process.

Finally, paper checks are an inevitable part of business. By leveraging Deluxe’s eLockbox solution, you’re able to alleviate many of the traditional challenges of paper checks like mail float, delayed payment posting and manual exceptions.

“You’re taking what was once paper and making it electronic, which gives you and your clients more efficiency and more scale,” said Kight. “It also makes for a better relationship, and something that is lasting, because you’re providing so much more efficiency.”

Source: Kight, Layne. Deluxe eLockbox Solution Overview Presentation, March 2023.