Going After Right Merchants for Remote Capture Pays off for ISOs

Merchants that are good prospects for accepting remote deposit capture services have different needs from many credit and debit card-accepting merchants, but independent sales organizations that do their remote capture homework will be rewarded. That was the word on Wednesday from several vendors speaking at the MidWest Acquirers Association 7th Annual Conference that work with ISOs in the booming remote-capture market. “It has to be the right merchant,” said Mary Winingham, vice president for merchant services at Wausau Financial Systems Inc., a Mosinee, Wis.-based provider of lockbox and other banking services and systems. Citing figures from research and consulting firm Celent LLC, Stacia Smith, business development manager for scanner maker Epson America Inc., said that about 14.5 million of the nation's 24 million merchants might be good prospects for remote capture, a service in which the merchant scans checks on-site and submits the resulting images and data electronically to the bank for deposit. Celent predicts about 3.2 million merchants will have adopted remote capture by 2012. But Winingham said many ISOs try to sell just about all of their merchants on remote capture, sometimes even to the point of attempting to persuade restaurants that have signs saying, “We don't accept checks” to start taking checks so that they can then take remote capture. Instead, ISOs should concentrate on those merchants that, while perhaps accepting cards, also get many checks. Such merchants include property managers, doctors' offices and other health-care providers, and car dealerships, according to Winingham and other speakers at the conference. For example, one property-management company Wausau worked with handled dues, rent payments, and other receipts for 110 homeowner associations?and thereby 110 separate databases. The company took in more than 1,200 checks per week, and once a week an employee went to each one of the 17 financial institutions the associations used. In all, it was a clunky, time-consuming process. But now the property firm is in the midst of converting to remote capture, which is providing faster access to funds and fewer data-entry errors, not to mention better use of employees' time. Winingham tells Digital Transactions News that the company can expect to save at least 12 to 16 hours per week in manual processing once remote capture is fully implemented. “I think it will go a lot higher,” she says. Some ISOs have been reluctant to add remote capture to their service offerings because it differs so greatly from traditional card services and doesn't generate percentage-based merchant discounts like cards do. But remote capture can produce a good revenue stream, according to another speaker, Caroline Marino, national sales manager at Waterloo, Ont.-based payment-automation technology provider RDM Corp. Pricing packages vary widely, but, as an example, a merchant may pay $100 to $200 for hardware and $15 to $50 monthly in recurring software fees, according to Marino. That means that a portfolio of 100 remote-capture-accepting merchants in its first year would, on the low end, generate $28,000 in revenue. One ISO that RDM worked with carefully honed its remote capture strategy and identified governmental, medical, and property-management merchants in its portfolio as good prospects for the new service, Marino said. The ISO is signing “one out of every two” prospects it's talked with, she said. The MidWest Acquirers conference continues Thursday in Lombard, Ill.