Tele-check payment still under study - Brief Article

Folio: The Magazine for Magazine Management, March 1, 1994 by Lambeth Lochwald

Check-by-phone technology could become an integral part of many publishers' telemarketing campaigns, but it seems to have a long way to go to gain acceptance with major publishing companies and the public.

Still, David Crane, executive vice president of QuickCard Systems, the Kimberton, Pennsylvania-based owner of Freedom Payment Service, says that the technique and technology have moved from the testing stages to full-fledged use for some publishing companies. (See "Subscribers pay by phone--with checks," FOLIO:, January 1, 1993, page 30.)

Crane has approached Time Warner and other publishers, promising that his check-processing service enables subscribers to charge their magazine orders to their checking accounts over the phone, thereby saving publishers the time and cost of billing those customers by mail. "We can speed up cashflow and there's no fallout from those who promise to send a check but never do," says Crane. He declined to reveal current clients, however.

Other vendors, including Fidelity Checks and International Banking Technologies, also offer this service through their telemarketers. With Freedom Payment Service, telemarketing operators collect the customer's bank name and account number, and send it to QuickCard, which checks for fraud before sending a "draft" payment back to the publisher 48 hours later.

"The more expensive the subscription is, the less likely people are to pay by check," says Paul Kerstetter, executive vice president of sales and marketing at Omaha, Nebraska-based telemarketer West Interactive, which has worked with QuickCard for more than a year. "And while the check option doesn't create dramatic increases in sales for less expensive publications, you do get immediacy of sale, particularly in impulse buying from TV ads."

Many circulation professionals remain skeptical. "It seems difficult enough for people to give their credit card numbers over the phone. Giving your checking account number seems an even bigger step," says one circulation executive with a major newsweekly. "Anything that can speed cash into our accounts would be a great help, but you can't do anything without consumer approval."