Wal-Mart accepts electronic cheques

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Wal-Mart Stores announced Tuesday it is accepting electronic cheques for online purchases, becoming the latest retailer to widen Web payment options in an effort to boost sales. The retail giant said it is allowing shoppers to use encrypted cheques for purchases at its Web site, Walmart.com. Once customers choose "pay by cheque," they will be required to provide personal information as a safeguard, company spokeswoman Cynthia Lin said. "People have been asking for (electronic cheques) for some time now and we've been working to make them available," said Lin, who noted customers were previously allowed to use only major credit cards and Wal-Mart store cards to make online purchases. "We expect to have many people paying with cheques online, like they do in our stores." Online retailers are becoming more comfortable with offering electronic cheques as an alternative to credit cards, third-party payment services and bank debit cards in making online payments, industry watchers say. Electronic cheques tend to attract people who do not have credit cards or debit cards, or prefer to play the float that cheques provide, said Mary Waggoner, vice president of investor relations for Certegy, which provides electronic cheque processing for Wal-Mart. Wal-Mart will ask customers to select a desired payment method. Once the "pay by cheque" option is selected, customers need to enter the name of their bank, account and routing numbers, drivers' licence information, address and their name, Lin said. Wal-Mart plans to continue accepting debit cards, credit cards and Wal-Mart store cards for online purchases, Lin said. Earlier this year, Wal-Mart and several other notable retailers reached a $1bn (£630m) settlement with MasterCard in a dispute over the fees they were charged by the credit card processor for handling debit cards. Waggoner noted electronic cheques allow customers to issue payment a day or so before the funds come into their account to cover the cheque, otherwise known as "floating" a cheque. But online debit card payments draw down a customer's cheque account immediately. Consumers are gaining an affinity for using both electronic cheques and debit cards when making online purchases. Visa USA, for example, has found that 35 percent of its e-commerce transactions are conducted with a debit card, spokeswoman Camille Lepre said. She added Visa USA's version of an electronic cheque is a debit card that can be used as a charge card. "It's similar to electronic cheques. It receives its funds from the same bank account and offers greater protections (for security)," Lepre said. Electronic cheques are gaining traction, as well, Waggoner said. She added: "We now have 75 clients from Wal-Mart to specialty stores to apparel stores to electronics makers like Gateway and Dell. Last year, we did $1.3bn in cheque transactions over the Internet and phone -- that was up 37 percent from the prior year."
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