The number one reason consumers don’t shop more online is because they are afraid to give out their credit card information. Ben Fisher thinks he has an answer: a software package that takes checking information from shoppers online, and prints out a physical check.
One of the biggest challenges facing online merchants has been the public’s fear of giving out credit card information online. “We are addressing the paranoia of the public,” says Fisher. “Most people are more paranoid of sending credit card information than checking information.”
Fisher is the owner of Virtual Internet Business Services (http://www.vibs.net), a full service Web design and marketing company. He also provides database and software services such as screen savers, customized databases, shopping cart software and multimedia development.
Virtual Bank Checks (http://www.virtualbankchecks.com) grew out of a problem that one of Fisher’s customers had. This customer wanted to conduct transactions through his Web site, but did not have an Internet merchant account because he felt that the rates charged for credit card transactions were too high.
Fisher sensed an opportunity. He developed Checkers checking software, which on May 25 evolved into Virtual Bank Checks. The software allows merchants to accept check information by phone, fax, or through an Internet form. Fisher’s software is to be used in addition to credit cards for online transactions, giving customers another payment option.
The way Virtual Bank Checks works is simple. The Windows-based software resides on the merchant’s computer. The merchant then sets up a standard form on his Web site and embeds a hidden tag into the form, which is not visible to shoppers or visitors. The customer fills out the form with his checking information and presses “send.”
The order and checking information is e-mailed to the merchant. To receive the order, the merchant checks his e-mail as he would any day, then starts up the Virtual Bank Check software, and has it look for orders. When the software finds the orders in the e-mail, it automatically extracts the information from the form and fills out the check screen for the merchant, who then prints up a batch of checks to take to the bank.
Fisher has put his virtual checks through a test drive of his own. In the past two months, he has accepted over $6,000 in checks for his business services – all through the Internet. The checks have ranged from $10 to $1,000. So far he hasn’t discovered any glitches.
While there are other electronic checking packages on the market, Fisher believes his is the first to actually include a feature that allows checks to be physically printed. Consumers, he says, trust a tangible draft more than an electronic payment. It’s a feature he hopes will prod more to shop online.
Two major areas of concern for users of this software are legality and security. Accepting checks in this manner is perfectly legal, Fisher assures. Three laws were passed allowing Internet check acceptance: the Uniform Commercial Code, Title 1, Section 1-201 [39] and Title 3, Sections 3-104, 3-403,2-403; the Code of Federal Regulations, Title 12 Chapter II, Part 210 Regulation J, Federal Reserve Bank, Part 2, Sections 4a-201 to 4a-212 and Romani v. Harris, 255 Md. 389.
But while it is legal, few bank tellers are aware of the laws, and Fisher suggests to not ask a teller ahead of time if they will accept checks printed using the software. He has only had one teller question a check, and when she was told to ask her supervisor, the teller did not bother.
A potentially bigger issue is security, responsibility for which rests entirely on the merchant. All the information coming from consumers resides on the merchant’s computer, so steps need to be taken to ensure that unauthorized people don’t have access. Merchants using the software should password protect the use of their computer at the startup level and also to access e-mail, where shoppers’ checking account numbers resides. As an added precaution, screen savers should be password enabled, so that if the computer is left on with the checking information, only those with access to the screen saver password can disengage the screen saver.
Fisher has built some useful features into his package. A hidden tag in the form allows merchants to identify all products or services that were purchased. It will also keep a database of all transactions. A nice feature is that if the merchant is online, the package will automatically send shoppers a tailor-made response.
This can be a valuable customer service tool. “Only a small percentage of sites on the Internet actually have any level of customer service,” notes Fisher. “We’re adding that element of customer service right into the software itself.”
Merchants can download the software from the site or have a copy sent to them. The fully-functional software is free to try for 15 days, after which it costs $200 to purchase. Blank checks can also be purchased for 32 cents per check.
