As one of the leading ACH-based (electronic) online payment service providers on the Internet, Electracash, Inc. (www.electracash.com) specializes in check acceptance and verification strategies.
With value-added services like time-based trials, direct deposit, and prioritizing service upgrades, the four-year-old Long Beach, Calif. company is looking to provide a lucrative alternative to the way some Internet paymasters do business.
"We deal with payments, that's the space that we're in, and we strictly deal with electronic checks. A lot of folks started out in credit cards and moved on to the check side of the business, but that's not the case with us ? we've stayed in this check processing niche and made it work for us," says Lee Falls, CEO of Electracash.
Though the majority of online purchases in the U.S. are completed via the four major credit cards, at least 20 percent of all online transactions are still processed from personal checking accounts. "We think those [figures] are growing. That is, if you offered credit cards and you have a check payment option also, then your sales go up," Falls says.
Falls and his management team saw an opportunity and capitalized on it. Integral to the Electracash formula was a thorough grasp of the online financial market and of customer behavior within it. "In the online space, checks are very important because you don't have as many onerous rules as you do with credit cards, with chargebacks, etcetera." Falls says.
"In Europe, for instance, you cannot get a French check cleared in Germany very quickly because there's no cross-border ACH," says operations manager Fitz Dearmore. "On this side of the pond, ACH allows you to cash a check and know that the bank the check is being cashed on will see it that night in both the U.S. and Canada."
Falls and other Electracash executives bring over 50 years of banking experience to the table, including management positions at financial institutions such as Bank of America, Security Pacific, Union Bank, and Cedars Bank (Los Angeles). In addition, members of the management team have provided payment-related and other consulting services to major financial institutions across the United States.
"With all the years of experience comes all of those things I've learned, like having banking regulators beat up on you if your bookkeeping wasn't up to par. After a while, you know you have to do something, otherwise, it'll be back to bite you later," Falls says.
Integral to the success of the company is the automated online check clearinghouse, or ACH. ACH is a payment system that all banking institutions have access to; a gateway that allows over 4,000 financial institutions in the United States to clear checks between each other very quickly.
By year's end, Electracash is projected to receive an estimated $1.5 million in revenue and to process about one million transactions. "We're planning for the future and our systems are redundant right now, so I want to move to where we have mirrored sites, where we're actually processing the transactions in two places," says Falls.
Achieving this objective helped fuel the decision to establish a satellite office in Memphis, Tenn.
The company had been contemplating the move during the last few years. After experiencing brief power interruptions during California's energy crisis, Falls realized the need for Electracash to establish a satellite tech hub elsewhere. "We have to be up to stay in business. For our customers, the same thing applies. If our business is not accepting checks, then we're losing revenue. So even being down for 10 minutes can hurt you.
"Another reason is that in the event one of our sites should go down, there's seamless transition to the other site so we wouldn't impact our customers," Falls adds.
On the horizon for Electracash is an automated password administration for Websites via the use of biometric identification technology. With keystroke and voice recognition technology protocols, the company seeks to streamline and further secure the online payment process.
"We pay to get good work done quickly," says Dearmore. "In a nutshell, we're the best online solution for taking checks on the Internet."