ECHO Signs Five Contracts With Collection Agencies to Provide Two New ACH Payment Services

Business Wire, Jan 31, 2001

Business Editors & High-Tech Writers

AGOURA HILLS, Calif.--(BUSINESS WIRE)--Jan. 31, 2001

Electronic Clearing House Inc. (Nasdaq:ECHO) announced contracts with five collection agencies to provide two new electronic payment services.

The services use the Federal Reserve's Automated Clearing House (ACH) to electronically move funds, one for collecting consumer debts by phone and the other for automatically re-presenting returned paper checks as electronic items. Both services are provided by XPRESSCHEX Inc., ECHO's wholly owned check services subsidiary, adding to the company's services to collection agencies nationwide.

The contracts have been signed with the following collection agencies:

-- Accounts Receivable Management Inc./Rockford, Ill.

-- American Collection Systems Inc./Laramie, Wyo.

-- Advanced Collection Services Ltd. dba Mastercheck/ Plainville, Conn.

-- Check Alert Systems Inc./Cadillac, Mich.

-- Credit Bureau Data Inc./La Crosse, Wis.

"We are committed to bringing a full set of ACH services to collection agencies and their merchants that will make check processing as easy, efficient and safe as possible," stated Steve Kirk, vice president of sales for XPRESSCHEX.

"With ECHO, Rocky Mountain Retail Systems and XPRESSCHEX all being involved in the processing of financial transactions for many years, our combined knowledge and expertise generates a full scope of financial services that are very desirable to a collection agency. Our goal is to make our services as close to `plug and play' as we can."

Rocky Mountain Retail Systems was acquired by ECHO in January 2000 and provides check verification to more than 160 collection agencies throughout the country. In addition, ECHO recently announced the signing of a Letter of Intent to acquire National Check Network, which serves 60 collection agencies nationwide.

Telephone Payment Service for Collection Agencies

Also known in the industry as "check by phone," agencies can collect from debtors by first obtaining a telephone authorization to electronically debit the debtor's bank account and then transmit the information to XPRESSCHEX for processing. To establish the service, XPRESSCHEX assists the collection agency with setting up the electronic file transfer process, working closely with the agency to test and certify the electronic processing.

The telephone payment service eliminates the need to print most paper drafts and deposit check by phone transactions in the traditional manner, which is not only more costly, but time consuming as well.

Future releases of this service will be made available directly to businesses such as service firms, mail-order firms and others that would benefit from expediting payments over the phone and offering this payment option as a customer service to consumers.

Automated Re-Presentment of Checks for Collection Agencies

The payment industry acronym for check re-presentment is "RCK." In this agency-directed RCK service, the agency transmits an electronic file of returned checks to XPRESSCHEX, which then re-presents the checks through the ACH. Consumers' bank accounts are debited and the merchants' bank accounts are credited quickly and easily, without annoying the consumer with collection calls, and saving the agency the expense of pursuing check collections that can be handled electronically.

Re-presentment reports help agencies identify checks that have not been collected automatically and that require the follow-up of traditional collection efforts.

A key benefit of an agency-directed RCK service is that it eliminates double entry of data when transferring check collection items from collection agency software to the format needed for electronic re-presentment. This provides the ability to move items seamlessly from an agency's collection software through the ACH system and back to the agency's system for further collection efforts, if necessary.

Since electronic items clear before paper items through the ACH, increasing an agency's collection percentage of re-presented items is another benefit agencies will see. Under National Automated Clearing House Association (NACHA) rules, checks can be re-presented for collection up to two additional times after the initial presentment, for a total of three presentments.

About XPRESSCHEX

XPRESSCHEX Inc. is a leader in the development and deployment of electronic check services with more than 10 years' expertise. Since the acquisition of XPRESSCHEX in April 1999, ECHO and XPRESSCHEX have worked together to develop a suite of check processing services and products to offer collection agencies, merchants and U-Haul dealers.

About ECHO

Electronic Clearing House Inc. provides credit card processing, check guarantee, check verification, check conversion, inventory tracking and/or various Internet services to more than 58,000 retail merchants and U-Haul dealers across the nation.

To take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, readers are hereby cautioned that this release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. Actual operations and results may differ materially from those expressed in the forward-looking statements made by the company.