The new module will expand the capabilities of the PEP+ automated clearinghouse (ACH) platform, enabling financial institutions to automate the monitoring and management of debit origination and returns. Banks can utilize the CheckFree PEP+ Debit Return Monitor to improve operational control and mitigate risk within their ACH operations, and on behalf of their treasury management clients, for increased competitive advantage.

According to an April 2005 press release from NACHA - The Electronic Payments Association, ACH volume grew 20 percent from 2003 to 2004 to reach 12 billion annual transactions. The introduction of new ACH transaction processing types, including Accounts Receivable Conversion (ARC), Telephone (TEL) and Web (WEB), have been successful, with ARC and WEB fueling most of the overall growth in the ACH network over the past few years. NACHA reported that annual ARC volume grew by more than 1 billion payments, and accounted for 54 percent of all ACH transaction growth in 2004, and the number of Internet-initiated ACH payments, known as WEB, grew over 40 percent from 2003 to 2004. Consumers and businesses have been embracing these transactions. In addition, new regulations, such as Check 21 and Re-Presented Check Entries (RCK), have encouraged financial institutions to continue their move away from manual, paper-intensive processes in favor of electronic payment processes.

While electronic processes significantly improve operating efficiency and reduce costs, they also increase the number of debit originations through the ACH. With the increase in debit originations comes a corresponding increase in the number of debit returns due to NSF, incorrect routing information and other factors. These returns can add incremental cost back into ACH operations due to handling required and potentially increase the bank's risk exposure.

CheckFree PEP+ Debit Return Monitor allows banks to automate the management of debit returns, improve intelligence on account-specific risk profiles and enhance item exception processing. Banks will be able to analyze and track returns by customer and file to identify high-risk accounts. With this information, an originating institution can set specific customer or originator holds on funds to mitigate exposure and potentially reduce write-offs. Banks can also establish customer-specific hold percentages and amounts as well as hold periods.

"CheckFree continues to lead innovation in the ACH market with product expansions that address evolving customer needs," said Esther Pigg, vice president of Global Product Management, CheckFree Software. "As the regulatory environment changes and ACH transaction types expand, financial institutions face new business and operational challenges accompanied by corresponding risk. CheckFree will continue to support its customers by delivering targeted technology solutions to address industry issues."