Check conversion via Back Office Conversion (BOC) has significant advantages, particularly over the Point of Purchase (POP) check conversion method, and is widely regarded as NACHAs reaction the merchant disappointment with POP transactions.
Back Office Conversion benefits for merchants and retailers are as follows:
Increased efficiency: Rather than converting checks one at a time at the point-of-sale retailers can scan batches of checks at regular intervals throughout the day or at the end of day. This streamlined deposit preparation vs. traditional paper processing. Avoid courier pick ups or visits to the local bank branch.
Less hardware: Because BOC deposits are scanned at the end of the day, store locations only need one scanner instead of multiple scanners in order to equip each cashier station.
Less training: With POP all cashiers needed training on the transaction process and check eligibility. With BOC a small number of employees need training.
Faster funds availability: Merchants that submit their back office conversion files directly to a bank (rather than via a third party provider) will benefit from faster funds availability compared to making a physical deposit at a local branch. In addition, the Sunday evening ACH clearing window will be a benefit for those retailers and merchants that receive a large number of checks over the weekend. They will now enjoy funds availability on Monday morning.
Optimized routing: Some banks will offer services that convert your entire deposit to electronic transactions, either via ACH or image clearing/IRD depending on the eligibility of individual items.
Reduced risk: BOC transactions are processed via the ACH network and settle the following day. Merchants and retailers will be notified of returned items the next day; returned item notification for paper checks can take several days. As ACH transactions the items are eligible for re-presentment, thereby increasing the odds that a transaction will be successful.
Opportunity to consolidate banking relationships: Back office conversion enables merchants to make deposits regardless of the distance between their store location and the closest bank branch. Merchants and retailers with limited cash deposits are more likely to achieve consolidation than those that continue to have cash processing needs.