In the past when a merchant received bounced checks, he would turn them over to a collections company for pennies on the dollar. But in the late 1990s, another option emerged.

At that time, U.S. banking system rules were changed to allow businesses to use the Automated Clearing House network (a.k.a. ACH) to electronically process the checks that they received from their customers. The new rules permitted up to three electronic presentments to collect an NSF item.

The new collection system, now referred to as RCK (Re-Presented Check) spawned a new industry of third party processors who assist merchants in collection on their bad checks. Usually, these processors were entrepreneurs who developed software and systems to efficiently convert paper checks into electronic form for collection, then present the checks more often (and at more opportune times) for payment. And because electronic checks take priority over paper checks on available funds, their attempts at collecting NSF items were generally fruitful.

Since each state also allows an NSF fee above the face value of an NSF check, these third party processors have been able to offer their services for ‘free’ to businesses—they simply keep the NSF fee ($25 average) for themselves while giving 100% of the face value of the check to their merchant customer.

Despite the fact that paper checks continue to decrease, the number of ACH payments is actually increasing. And the Check 21 Act—which enhanced the speed at which banks electronically exchange check information—is only expected to increase the number of bounced checks.

ePayments Corp is already one of the largest players in this fragmented market.

We can design a check recovery program that not only eliminates the fees associated with bad checks, but shows you how to make a profit on bad checks.