 Millions of Americans can be counted among the “financially underserved,” “unbanked” or “underbanked” — people who are in need of a safe and convenient place to cash their checks.
Statistics show that an estimated 30 million consumers cash 180 million checks valued at some $55 billion at non-financial institutions each year. These check-cashing establishments provide a valuable service — but often at a burdensome cost to the consumer.
Helping these individuals is a natural fit with credit union philosophy, and Certegy’s trade-marked program“PayCheck Accept” allows credit unions to tap into the huge market for cashing payroll and government checks, while protecting themselves from fraud and potential losses. PayCheck Accept provides a uniquely safe method for the acceptance and cashing of payroll and government checks at credit union branches.
By cashing checks for non-members through PayCheck Accept, credit unions will generate income and save consumers money by charging a reasonable fee of just 2 percent. At the same time, the program helps credit unions establish relationships with potential new members — truly a win/win situation.
One of the unique features of PayCheck Accept is the ability to detect identity manipulation, a common problem due to the easy availability of desktop check printing software and fake forms of identification.
Implementation of the PayCheck Accept service is simple. All that is authentication process is needed is an electronic check reading device, similar to a credit card authorization terminal. Information technology development isn’t necessary — a standard telephone line and electrical outlet make theunit operational.
Certegy’s success rate in fraud prevention enables the company to guarantee the checks authorized for cashing. In the event a check they approve is returned unpaid, Certegy
reimburses the credit union 100 percent of the face value of the item.
In addition to customized risk management, the program uses credit file information to confirm the identity of the consumer. This allows Certegy to leverage that information and validate the identity of a consumer who is attempting to cash a payroll or government check.
By cross referencing the consumer’s name and Social Security number (SSN) entered at the point of check cashing with what exists on the Certegy credit database, a comparison can be made and identity validated. Once identity is confirmed, risk management processing will be initiated to ensure that preestablished check cashing limits have not been exceeded.
No other provider is able to offer this added level of security to protect the credit union. The authentication process is accomplished through the following methods:
- SSN Validation — Determines that the number is the proper length, that it meets federally issued guidelines via a table provided monthly from the Social Security Administration, and that it passes a check digit routine.
- SSN Fraud Tools — Using products provided by credit bureau companies, in combination with other consumer acquired data, Certegy is able to quickly authenticate the consumer. This process includes using credit bureau products to validate the SSN against issued files and reported fraud, comparing the SSN and last name entered to the credit database. Certegy also compares the age of the consumer, based on the driver’s license date of birth, to the age indicated by the SSN returned by the credit bureau.
- Driver’s License Algorithms — The use of state issued algorithms is invaluable in reducing the possibility of accepting fraudulent IDs. Certegy updates changes in algorithm equations as issued, and verifies updates/changes in formats or new number ranges being issued with each state’s department of motor vehicles.
The program will prevent authorization when a consumer ID is associated with a previously returned and unpaid obligation and it also monitors check cashing activity to identify potentially “high risk” or unusual check cashing behavior. Some other key service offerings include:
- Verification — Real time check authorization with accesses ID Validation, Negative, Positive and Risk Management Files delivering highly accurate decisioning information when returned checks are the responsibility of the client or can be outsourced to Certegy Payment Recovery Services (Accu Chek
Collections Platform).
• Warranty — Real-time check authorization that accesses ID Validation, Negative, Positive and Risk Management Files ensuring a process whereby returned checks are reimbursed by Certegy.
• Check Cashing — Real-time Check authorization that performs consumer authentication (including ID validation), Negative, Positive, Risk Management and national payroll processor files, ensuring a process whereby returned checks are reimbursed by Certegy.
Credit unions have historically been faced with a dilemma in serving underserved non-members. On the one hand, credit unions have an obligation to reach out to people of modest means — consumers who typically make up the underserved or unbanked segment of the population. On the other hand, providing services to non-members that incur risks and costs to the membership is not a particularly attractive proposition.
Certegy’s PayCheck Accept program will enable credit unions to turn this dilemma into an opportunity.
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For more information on PayCheck Accept, contact Jesionowski at (800) 262-6285, Ext. 538, or ewj@mcul.org.
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Regulatory Affairs
