MIAMI – DRTV has always been reliant on credit card holders for its customer base. This has left an estimated 60 million Americans who don't have credit cards out of the marketplace. However, steps are being taken to expand the market to include this untapped resource through technology that processes checks over the phone. Consumers' checking accounts would be automatically debited.
“More than two-thirds of all transactions over the Internet are made through check payments,” said Kevin Schor, vice president of sales and marketing for National Bank Drafting Systems, Fort Worth, TX. “In our pilot program, FoneChex, the cost to our clients is about half the cost of credit card transactions.”
In the billing process, customers receive the bill from NBDS and customer service calls regarding payments are made referred to its call centers. The products will not be shipped until the customers' checks are authorized.
“Our turnaround time is 24 hours,” Schor said.
Industry insiders are skeptical of this technology because they say it could increase the chance of returned checks, which cost companies money through fees.
“Bounced checks mean more costs and check writers rarely get the amount of the order right on the check,” said Thomas Redding, vice president of Fredriksen Television Inc., Falls Church, VA. “Check signers also deny us the instant gratification we receive from credit card holders.”
The industry, however, does see the need to bring check users to DRTV.
“We are warming up to the idea of bringing in 60 million people,” Redding said. “The Electronic Retailing Association is taking the steps needed to change attitudes and biases against check holders.”