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Distributive Lockbox – Moving Merchants into your Processing Cloud

Strategically Speaking
Oct 23, 2013
Rob Hudecek Author: Rob Hudececk,

In these less than confident times, getting back to core values and competencies seems to be the resounding direction many businesses are taking.  Vendors are never looking to sell more widgets and process invoices or admit more patients and process claims.  Whether they are a retail store, city water department, hospital, or even a faith ministry, merchants across all verticals are looking for ways to minimize distracting duties that take any time away from their primary product or service.

Enter the lockbox — rooted in the concept of payments coming into a physical (locked) post office box that is accessible to a financial institution or commercial service to process on the merchant’s behalf. Today with the increased adoption of technologies, such as electronic bill presentment / payment, payment portals, automated character recognitions, and electronic deposit; the definition has blended to cover a wide array of services all with a common goal: relieving merchants of the work it takes to process payments.

As eager as merchants are to offload their payment handling, they also want to keep their hands somewhat in the process. Just as teller and branch image capture has been able to share the workload of proof of deposit processing in banks and credit unions, distributed lockbox is making strides to do the same for payments.  The distributed model, typically deployed through the web via a browser, allows the benefits of sharing workload, supporting division of duties, and concentration of expertise.

Features of distributive lockbox include:            

  • Remote scanning at the branch and teller line increases foot traffic inside the branch for payers of local utilities, tax offices, and businesses.
  • Remote scanning at the merchant eases the lockbox burden of mail opening, staging (batching items), and scanning. This feature allows the merchant to scan walk-in “stranded payments” or even scan all of their items, maintaining their payment mail-in address, while alleviating the cost and management of in-house imaging software.
  • Exception entry at the merchant allows more same day processing of lockbox payments and deposits by allowing merchants to make important transaction decisions, while minimizing the amount of items rejected and returned to the merchants.
  • Real-time, web-based reporting provides consolidated reports and item research for all payments; whether received by mail or walk-in.

 Distributive Lockbox

The timing is perfect to employ these distributive technologies into your lockbox offering; not only can it expand your geographical reach, it allows your merchants to feel connected to the work you are doing for them.  What methods is your institution employing to help move merchants into your processing cloud?

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