April 23, 2009

Yodlee (Redwood City, Calif.) has released what is says is an efficient, cost-saving alternative to traditional paper checks banks use to process online bill payments. The Yodlee PostcardCheck is a new form of check that eliminates envelopes and can be mailed at cheaper postcard rates.

According to Joe Polverari, SVP strategy & development at Yodlee, the checks are still processed in the same manner as always—multiple processors work with multiple printing vendors to send payment instructions and have the checks printed and mailed. However, the instructions are what differs with the PostcardCheck.

"What Yodlee is changing is the instructions for the single-check payments (checks going to a single address), which is the largest cost of most bill pay systems," he told BS&T. "Those single-check payments will now be printed as a Yodlee PostcardCheck instead of a traditional check and mailed using less expensive rates and printing costs. Yodlee is working with multiple, distributed printers to maximize efficiency and minimize payment time."

PostcardChecks are folded in half, perforated and sealed completely. Polverari says they meet the U.S. Postal Service's requirements of a postcard, while ensuring data is packaged securely for consumer privacy. "Due to the innovative size of the Yodlee PostcardCheck and the fact that it does not require a separate envelope and can be mailed at a postcard postal rate versus a standard bulk mail rate, it is far less costly to mail than a traditional check and environmentally friendly, requiring less paper output."

According to Yodlee, banks and other check processors can save up to 30 percent per payment from printing and postage costs by using PostcardChecks.

The PostcardCheck solution sits within the processor's core payments function. It is designed for rapid deployment and is available for integration with any existing online bill pay solution, or as an included feature of the Yodlee BillPay suite of solutions.

Polverari says Yodlee PostcardCheck is the first of its kind and has a patent pending for its design. "There has not been much attention given to paper check payments as of late, but this is an important area to financial institutions due to the costs incurred," he notes. "Paper payments are by far the most costly component of any online bill pay system and nearly two out of every 10 payments originated online in the United States are still processed via paper check."

By using PostcardCheck, Polverari says the cost savings can be obtained without an increase in returns or rejections typically associated with paper payments. "And, it's more environmentally friendly," he relates, adding, "The Yodlee PostcardCheck also contains marketing messages and simple actions to help recipients convert their payments from paper checks to online payments in the future—the least costly and most 'green' method of all."

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