Web-Based ACH Origination Serves Commerce South’s Customers

By Phillip J. Britt Microbanker Banking Technology Strategies Newsletter
Volume 4, Number 9

Commerce South ($300 million) Freeport, FL, like many other community banks, was seeing sharp growth in customer demand for Automated Clearinghouse transactions, especially in recurring monthly payments and in direct deposit accounts. Though the bank had an ACH software program, it was far from seamless and it didn’t give the bank a way to immediately examine the user’s account to ensure there was enough money to conduct the ACH transaction. So the bank migrated to Goldleaf Technology’s Goldleaf Client, which reduces the bank’s risk and emables Internet ACH origination as well.

“It’s a wonderful package, with everything we needed,” says Becky Robbins, vp. The bank targets corporate customers, and most have ACH needs, Becky says. Some have direct payroll deposits for customers, while some have recurring payments for customers. For example, one condominium association manages more than 137 different condominium properties, each with multiple units. Each of the condo owners pays a monthly condo association fee.

With the ACH Web client product, the corporate customer receives ACH credits, while the condo owner’s account is debited via ACH each month, rather than the cumbersome process of mailing, receiving, reconciling and processing checks.

Once a corporate customer signs up for the program, he enters the necessary information in the Goldleaf Web client program, which is branded by the bank for the ACH credits, debits or both.

An important element of the Goldleaf technology is that it automatically alerts the financial institution if there isn’t enough money in the payor’s account to complete the transaction. This reduces the bank’s risk over the method with the previous vendor, in which a corporate customer had to load information on a disk, then bring it to the bank for loading onto the bank’s system. There were problems with accounts with insufficient funds as well as with incorrect and incomplete entries, Becky says.

“We needed an ACH program that gave us better control,” Becky adds. “It’s really streamlined the process for us.”

If the corporate client doesn’t want to use the Internet, he still can perform his ACH transactions, and then send the information to the bank. The data will automatically populate the Goldleaf system, which is maintained on the vendor’s premises.

Bank Stays Competitive
“It’s not so much a money saver for us,” Becky says. “But to stay competitive, community banks have to be able to offer competitive ACH services.”

With the growth of the Internet, telephone-based payments and electronic check conversion, community banks are finding a greater need to offer ACH services, says David Peterson, Goldleaf Technologies evp.

Fortune 1000 companies have been using ACH for several years, but in the last couple of years, an increasing number of smaller companies – which are very important customers for community banks – are using ACH for direct deposit of payroll as well as for recurring and non-recurring payments, according to David.

However, he sees the biggest growth in ACH needs from the growth in check electronification. An increasing number of companies are scanning in checks and converting them to ACH debits to get quicker funds settlements and to reduce collection and processing costs.

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