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Prelude's Insights on Outbound Payments Blog

Payment Processing: From MICR Checks To Electronic Forms Of Payment

How Businesses Can Be Effective and Efficient With Current Infrastructure for Issuing Payments

MICR Checks for Payments

Recently, in the CFO Journal, a section of the Wall Street Journal, an interesting article regarding “Why Can’t We Get Rid of Checks” highlighted that U.S. businesses still pay half of their bills with paper checks.

Being a software solution company that provides outbound payment processing solutions, Prelude Software can confirm that statistic. Although Prelude’s PayPilot® solution enables far more payment method options than MICR check processing, we understand the nuances around the MICR check process that companies require. It is far more than just check layout and proper placement of the MICR line. Along with many self-service features, Prelude can help with anything a company would desire in design, layout and printing.

When people talk about real-estate, the familiar and apropos phrase is, “... the three most important things you need to care about are location, location, location”. In payment processing, we have our own mantra, “... the three most important things you need to care about are safety, security and control”.

With Prelude’s software application, PayPilot, businesses across many different industries feel they have more safety, security and control because of the features and functionality we have built in to them. As an example, user authentication, user permissions, signature authority, fraud protection (e.g. Positive Pay) and approval processing are all fully met using the best practices Prelude helps establish and administer.

Along with the stated top three things, it might be argued that flexibility would be a fourth item of equal importance. PayPilot is robust in features and functions that allow significant flexibility. One particular example of flexibility is the notion of being “agnostic.” PayPilot allows businesses to have the flexibility to be bank agnostic (add or change banks within minutes, at their discretion, with self-service capabilities) and printer agnostic (use any printer that supports MICR toner or ink). These two examples represent amazing flexibility that businesses typically do not have on their own. By contrast, without PayPilot many companies have interfaces between their core, originating system and their bank(s) that make it difficult to add or change because of the time, resources and cost necessary. Similarly, without PayPilot, many businesses are pigeon-holed into a particular family of printers because it is all that the originating core system was enabled to handle, therefore narrowing any options for better performance and disaster recovery.

Related, Prelude’s solutions also help with all of the necessary ancillary processing like syncing with other backend systems, like general ledger or web portals, or third-party software for escheat, document management, 1099 or estimating, and the U.S.Government for OFAC scrubbing to be compliant with the U.S. Patriot Act.

As the WSJ article attested, most companies are paying up to $20 per check to process. PayPilot enables multiple ways to bring the cost down and be more effective and efficient. One way that clients benefit from PayPilot in this regard is the ability to bulk payments. In essence, payments that are to a recurring payee, like a glass vendor or rental car company, can be aggregated and sent out as one payment instead of hundreds. PayPilot will also send the EOP (explanation of payment) or stub info for each of the individual payments that roll up to the aggregate.

Getting back to the main point of the WSJ article, why it is difficult for businesses to get rid of paper checks, we at Prelude recognize that one of the biggest barriers is the limited payment capabilities in existing infrastructure at many companies. Many legacy applications do not include the ability to make electronic payments. Upgrading or replacing these legacy applications can be expensive and time consuming. PayPilot provides the ability to bridge this technology gap.

Prelude has tremendous experience and expertise in helping companies to migrate payments from paper check to other, more efficient and cost-effective payment options. PayPilot can help extend the life-cycle of existing core, originating systems that may be incapable of requesting more than a paper check process. As an example, the core system still thinks it is sending the payment out as a check, while PayPilot recognizes and processes payments as an electronic payment. This allows for significant cost savings and processing time savings. From ACH, debit cards, virtual ghost cards (single use accounts), to tokenized payments, PayPilot enables multiple options beyond MICR Checks for issuing payments.

PayPilot is used by savvy businesses like AAA Insurance Exchange, ConEd, Country Financial and Esurance. For more information how you can benefit from PayPilot, contact Bill Clausen at 508.650.0033 x321 or


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