The service enables a company accepting cheques at its place of business to obtain real-time account verification and authorisation directly from a customer's deposit account, while they are at the counter. The cheque payment is then converted into an electronic transaction for processing via VisaNet.

Sanjiv Sanghvi, executive vice president, Wells Fargo, says offering the option to pay by cheque is a convenience that many of the bank's business customers want and need to provide to consumers.

"Cheques, however, bring with them distinct risks that can only be minimised, not eliminated. This new service gives cheques the convenient, faster processing of other electronic payments," says Sanghvi.

Wells Fargo is integrating the POS cheque conversion programme with its merchant card services, so cheques can be converted using the same equipment as credit and debit cards.

Dante Terrana, director, business development, Visa POS Cheque Service, says transaction growth in the cheque conversion programme has increased in excess of 500 per cent year to year over 2002 as merchant adoption of cheque conversion continues to proliferate.

Research from Visa shows that paper cheques continue to be the most popular form of payment and are used for approximately 85% of all non-cash personal spending.

Annually, merchants incur approximately $23 billion in cheque handling and fraud costs – averaging more than one dollar for every cheque written at the POS. Visa says one reason for these high costs is that a typical paper cheque passes through six to twelve different pairs of hands when processed.