National Check Trust

National Check Trust, Inc. (NCT)

Type	Private
Industry	Risk Management
Founded	1991
Headquarters	Miramar, FL, USA
Key people	Martin (Marty) Halpern Owner President CEO Thomas Lonardo Executive Vice President Chief Financial Officer Alex Borroto Chief Operating Officer Dorene Lugo Vice President Human Resources Robert Frank Vice President Information Technology Jeanine Goodstein Vice President Sales & Marketing Alan Gartner National Sales Manager
Products	Financial Services
Employees	120 (11-2007)
Website	www.nctinc.net

History

In 1991, Martin (Marty) Halpern founded National Check Trust, Inc. (NCT) His experience as a successful sales mananager and later as an executive at other Check Guarantee firms such as Instacheck, prompted him to create his own company that would ultimately provide better service and a better array of features and benefits than his competitors. That remains the company's guiding principal today. The company has grown to be the sixth largest check guarantee service provider in the United States but with an all important place as the company with the highest check average ($1152) in the industry. Check Guarantee Rankings, 2006 by Nilson Reports

Industries that require insurance for these large checks and serviced by NCT are Automotive, Building Materials, Furniture, and Equipment Rental, among others.

Check Guarantee

The Check Guarantee industry is made up of many players, all of whom play an important role in the passing of a check from the writer to the merchant to the bank and through the Federal Reserve System. One could say that check guarantee provides a "stop-gap" role in the early part of the check acceptance stream.

Check acceptance, as an industry, is not a new one. Banks have been transferring money between parties in some fashion since Roman times. The Dutch began allowing "cashiers" to transfer funds between buyers and sellers of goods traded by "cheque" around 1500. The first printed checks are traced to 1762 and British banker Lawrence Childs. The word "check" also may have originated in England in the 18th century when serial numbers were placed on these pieces of paper as a way to keep trace of, or "check" on, them.^[1][2]

Like the early processors of checks, merchants and businesses today face the likelihood that any portion of checks will be returned to them unpaid, causing them to have to begin active collection processes to recoup their funds. The check guarantee industry has emanated as an off-shoot of the standard Collection agency, or a 3d party company that, for hire, will share in any funds that are recovered from a dishonored check writer, also known as the debtor. But, in check guarantee, the fees are paid up front and are nominally lower. The first check guarantee company is unknown for certain but ^[3]Telecheck was one of the first under many names and franchises including Welcome Check, among others.

What NCT Does

It is estimated that $50 Million in bad checks are written to businesses every day.^[4] Checks go unpaid for Non-sufficient funds and NCT works to help merchants combat this dilemma. Check guarantee companies, like NCT, take care of the collection matters regarding most checks that they have acknowledgement and acceptance of. This offers a risk mitigation buffer for merchants and check-accepting business that don't want to risk money and time but want to increase cash flow by freely accepting checks. It's much like "check insurance".

In today's competitive and free credit society, checks continue to offer additional cash flow options like ^[5]float, among others, to extend a business's buying power. By utilizing checks in legal, but creative ways, important credit resources are not tied up if a business can use checks as a way to stretch budgets. Also, checks—while in decline are still used quite often and also offer banks lots of profit in their current form.^[6] In today's electronic marketplace, a check is "authorized" by and through many technologies including check readers, check scanners ^[7], voice authorizations to a call center operated by the check guarantee company and via check guarantee Internet authorization portals, to name a few.

When a business's pre-authorized check is returned unpaid for almost any reason, it is normally called a ^[8] warranty or claim. A merchant presents the check to NCT for payment, usually in full. A nominal percentage of each check is billed to the merchant on a monthly statement just as a merchant would pay a similar nominal fee with a merchant account for the privilege of accepting credit cards. The entire process end-to-end, including the authorization, the acceptance, and the payment back of any subsequently returned check(s) is completed in approximately 30 days, on average. With the advent of electronic clearing and Check 21 Act, the cycle can be much shorter and ECC, or Electronic Check Capture, is a new tool utilized by businesses to receive check funds in a faster and sometimes safer way.

Like any industry, check guarantee companies like NCT are providing more and more features that change with the needs of the marketplace. Those features include flat rate plans, the aforementioned ECC, and back-office Automated Clearing House (ACH) portals that get payments to and from banks faster.

Industry Regulation

In today's marketplace, most transactions (even paper ones) will have been electronically moved about between banks and their depositors. NACHA-The electronic Payments Association is a not-for-profit association that represents more than 11,000 financial institutions through direct memberships and a network of regional payments associations, and 585 organizations through its industry councils. NACHA sets the operating rules and procedures for the ACH network and their rules govern much of what companies like NCT do.

References

1. ^ "A Brief History of Checking". http://homeschooling.about.com/gi/dynamic/offsite.htm?site=http://www.echeck.org/library/history.html. 
2. ^ "History of banking". http://www.historyworld.net/wrldhis/PlainTextHistories.asp?historyid=ac19. 
3. ^ "Telecheck". http://www.firstdata.com/product_solutions/payment_solutions/telecheck/index.htm. 
4. ^ "Making Your Business Rubber-check Proof". http://www.intelligentbanking.com/natl/news/biz/cashflow_banking/20010402a.asp. 
5. ^ "Float - The New York Fed". http://www.newyorkfed.org/aboutthefed/fedpoint/fed08.html. 
6. ^ "CXO America "Check's Aren't Checking Out Anytime Soon"". http://www.cxoamerica.com/pastissue/article.asp?art=25428&issue=141. 
7. ^ "Check Scanners Comparison Chart". http://www.magtek.com/products/check_readers_scanners/cc_che_sca.asp. 
8. ^ "Check Guarantee". http://nctinc.net/CHECK+GUARANTEE.4.lasso.