With Carreker in Hand, CheckFree Plans ‘All-Transactions’ File

Bolstered by its recent acquisition of Carreker Corp., CheckFree Corp. is working on a product that will allow banks to view and manage both check and automated clearing house data in one integrated file. The new system, which will also permit long-term storage of ACH data, will be linked to a routing engine that will let banks control whether items should be processed as images or ACH debits, depending on such considerations as cost and float time. The so-called all-transactions file is six months away from commercial availability, says Randy McCoy, chief technology officer at Norcross, Ga.-based CheckFree. The routing engine, he says, is 12 months away. Based on technology developed at Carreker for checks, it will provide what McCoy calls an “enterprise payments portal” giving banks and their customers a comprehensive view of payments data and allowing them to verify at a glance whether deposits have been recorded and see where they are in the clearing chain. “The whole industry has got to get together and understand this better,” says McCoy, referring to the fragmented approach banks take to check and ACH information. Indeed, historically banks have discarded ACH data after about 30 days, he says, leaving ACH transactions more vulnerable to fraud. Warehoused check data, on the other hand, allows banks to run programs, such as check-number sequencing, to better control fraudulent activity. “ACH has never had a data-retention strategy, and that's not the way to go,” says McCoy, who adds the fraud risk arising from the failure to store ACH data could ultimately add to per-transaction costs, making the transactions more expensive than the relatively low fees they carry would imply. With its $206 million acquisition of Carreker (Digital Transactions News, Jan. 2), CheckFree gets access to the Dallas-based software company's remote-capture technology, which allows merchants to turn checks into electronic images before sending them to their banks for clearing. This check-data warehousing capability will form the basis for the new all-transactions file, which will integrate check and ACH information. The effort will also build on CheckFree's historic strength in ACH processing, but without Carreker, says McCoy, the product would likely have been less useful to banks. “In the past, we would've written our own ACH warehouse, and banks would've been stuck with side-by-side [check and ACH] transaction files,” he says. “Carreker is a leading provider of remote capture. We don't do any of that.” McCoy says CheckFree plans to target the 100 largest U.S. banks for the new product.