The initiative, announced today at the NACHA Payments 2004 conference, will leverage the combined power of CheckFree's leading accounts receivable conversion solution, PEP+ reACH(TM) with the NetDeposit Decision Gateway(TM). The Decision Gateway acts as an intelligent rules-based engine that allows organizations to determine the optimum electronic check payment channel at the item level -- Automated Clearing House (ACH), Image Replacement Document (IRD) or Image Exchange (IE) -- based on a number of business rules tailored for each customer and its bank. The NetDeposit Decision Gateway will identify and convert eligible ARC items into an ACH format, and the payments will be sent to CheckFree for processing.

For corporate billers, remittance processors and financial institutions that already use ARC solutions with PEP+ reACH, CheckFree can now offer additional check truncation services for all other lockbox paper check items that cannot be converted today.

"CheckFree has demonstrated its ability to convert the highest possible percentage of checks to ACH through the use of its proprietary financial institution file, which is based on transaction intelligence built over 20 years of electronic bill payment processing," said Denny Oswalt, senior vice president and general manager of CheckFree ACH Solutions. "Through our affiliation, we can address the remaining ineligible items with a solid electronification strategy through NetDeposit's national image exchange initiatives and IRD network."

NetDeposit will integrate capabilities from CheckFree's ARC solution, PEP+ reach(TM), to offer customers CheckFree's leading ARC solution, alongside its other electronic payment channels, Image Exchange and IRDs. NetDeposit's customers can leverage check imaging to potentially truncate all checks and remove the paper from the clearing and settlement processes. These items can be routed through an image exchange network, or through a nationwide IRD print network.

"CheckFree shares our desire to redefine the market during this remarkable period of change in the payments industry," said Danne Buchanan, CEO, NetDeposit, Inc. "When you consider CheckFree's status as the leading ACH solutions provider, it is a natural extension to expand check conversion within remittance operations. This partnership will provide substantial value to our common customers."

This combination of solutions and choice of payment channels offers large billers and remittance processors expedited processing and clearing of payment items, greater cost efficiencies in remittance operations as well as optimized funds availability and reduced transaction risk across a single platform.