Aptys, a US-based company, has developed a mobile reader
which can convert cheques into ACH payments in a matter of seconds,
significantly reducing the time lag between the receipt of a
payment and settlement. Charles Davis reports on the technology and
its applications.


A Texas start-up company is
developing a solution to one of the last obstacles to widespread
adoption of mobile business-to-business payments.

Aptys Solutions, a Texas-based
entrant in the mobile payments market, has built a mobile reader
that allows mobile phones to convert checks into ACH payments in

Mobile phones can already be used
to accept credit cards and to convert paper checks into digital
images, but to date there has been no solution aimed at connecting
mobile devices to the ACH network, a huge part of the
business-to-business payments mix.

Mobile ACH conversion could be a
huge step forward for the mobile payments market, as the ACH
channel is particularly appealing for business-to-business
transactions where checks remain the dominant method of

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The Aptys solution requires a
hardware add-on that allows phones to read the magnetic ink
character recognition line on paper checks to create an ACH file.
Beyond the addition of the add-on, the Aptys solution does not
require any change in behaviour on the part of the company making
the payment.

Aptys, which launched in April,
markets payment processing technology solutions to banks and
correspondent banks. Its main product is PayHUB, a
treasury-management system that handles multiple payment types on a
common platform, which Aptys says will reduce cost and complexity
for its users. This infrastructure makes technology such as the
MICR-scanning system possible.


Integration is

Aptys’ mobile check scanner is
expected to be unveiled later this year, and likely will resemble
Square’s credit card reader, a small plastic gadget that connects
to the headphone port of a mobile device and interprets payment
data as an audio signal.

Aptys said its solution is aimed at
integrating all of a financial institution’s payments through a
single system. PayHUB hopes to fill this gap by effectively
assisting financial institutions in growing revenues and attracting
new customers by offering an independent, browser-based system and
offering new products and services to existing customers all while
reducing costs.

“The banking industry has grown and
evolved in a compartmentalized fashion, which has resulted in a
great deal of inefficiency,” said Sean Pennock, president of Aptys

“The existing methodology for
processing payments and image exchange has been a fact of life for
financial institutions to date. We are providing an alternate,
simpler approach to handling all types of payments and image
exchange while also enabling financial institutions to regain paper
cheque processing revenues and drive additional revenues through
correspondent banking initiatives.”

Aptys offers PayHub through a Web
browser, which takes about 30 days to activate. The company also
can host the system if financial companies prefer.


How it works

To get started, banks set up
administrative protocols, which include the option to limit
customer access. When chosen, the smaller financial institutions
and their customers may only have access to ACH and check-image
exchanges or just wire funds transfers. Enabling banks the option
to restrict access can help reduce risk and generate more

By providing financial institutions
the option of a single point of entry for all of their payment
solutions, Aptys Solutions could free these institutions from the
efficiency losses and expenses associated with managing multiple
vendor relationships. More importantly, Aptys enables financial
institutions to effectively generate revenue by processing payments
through unique delivery channels to financial institutions in a
correspondent banking relationship.

PayHub is supported by Microsoft
64-bit technology, which can process higher volumes of transactions
than other processing systems. It also can enable Aptys to analyse
transactions and provide instant feedback to banks. Additionally,
PayHub captures transaction data in a single archive, which makes
it easier for banks to access information. Eventually, Aptys plans
to enable banks to run analytics on specific archives to locate
fraud or other trends across specific payment types.

“Because of Aptys Solutions’
single-channel approach solution, financial institutions will not
only be able to reduce the cost of managing multiple solutions, but
also improve customer service,” said Pennock. “Our solution is
designed from the ground up with correspondent and community banks
in mind and the true ROI of our service lies in the ease in which
correspondent banks are able to provide enhanced customer support
services through the solution’s support tools.”

Like the mobile market itself, the
market for mobile payment acceptance is growing seemingly with each
passing day. Besides Square’s technology, which today works only
with Apple’s iPad tablet, VeriFone Holdings’s has an iPhone card
reader attachment sold in Apple retail stores, and Mitek Systems
sells a check-imaging application that works with phones’ built-in
cameras to convert checks into digital images.

Such alternative payment providers
as Obopay and the PayPal unit of eBay enable merchants to accept
payments through phone software, and many conventional
manufacturers of payment card readers sell portable versions of
their products.

Aptys’ technology stands apart,
however, as it serves a definite business need – narrowing the time
gap between the receipt of a payment and its settlement. Cutting
that time lag down by even one day is a huge selling point for

One main PayHub benefit for banks
is the opportunity to save money by using a single system. The
price to use PayHub varies and is customised depending on whether a
bank wants to operate the system in-house, have Aptys host it, or
operate as a software-as-a-service model. A bank’s transaction
volume also is taken into consideration. In-house includes license
fees and annual maintenance, software-as-a-service includes a
monthly fee, and hosted services include a combination of fees.

Whether that alone can convince merchants to sign on to a
service that requires an add-on piece of hardware is anyone’s