First Citizens Launches Electronic Check Conversion Subsidiary

T-Tech Inc. Will Market Services To Banks

May 7, 2001

RALEIGH, N.C.— First Citizens Bank has launched a new company to facilitate electronic check conversion, which reduces the costs of accepting checks for businesses.

T-TECH, a wholly owned subsidiary of First Citizens, will offer the check conversion processing services to banks that can in turn market the product directly to their business customers.

"Even as electronic payment systems make advances, consumers continue to write billions of checks every year, and we see no signs that consumer preference for paper checks is slowing," said Jim Hyler, vice chairman of First Citizens. "Electronic check conversion allows consumers to retain the use of paper checks while offering businesses the greater efficiency of electronic transactions."

Consumers write nearly 70 billion checks each year and make $635 billion in payments through checks at the point of sale.

Electronic check conversion uses the existing automated clearinghouse (ACH) system to collect checks at the point of sale as electronic debits. The check is scanned through a reader and the transaction is completed electronically. The voided paper check is returned to the customer along with a receipt for the transaction at the point of sale. The funds are collected electronically and direct deposited into the merchant's checking account. Electronic check conversion makes business deposits available quicker because it does not require paper deposit slips and avoids the standard 2 p.m. deadline for funds to be credited on the day they are deposited. The system also utilizes check verification, which compares account information to a national database to determine if there is a history of fraudulent activity. Check verification significantly reduces the number of fraudulent checks accepted at the point of sale.

Wiley Tillett, a former First Citizens executive in electronic commerce and item processing, is president of T-TECH.

"Merchants who have been a part of the pilot for this system say that the efficiencies involved in converting checks are realized immediately," Tillett said. "The speed for clearing these transactions makes funds available faster, and processing costs are substantially lower. There's also more efficiency in operational areas, such as the time required to close out a cash register."

First Citizens Bank is offering T-TECH's services to its business customers through its merchant services division, which also provides credit card acceptance services to businesses.

T-TECH, Inc., which is based in Charlotte, N.C., is marketing the service to small and mid-size banks. The company does not deal directly with merchants, so it does not compete with banks for clients. Revenue is generated on a per item basis, similar to debit cards. In addition to electronic check conversion T-TECH's client banks can offer merchants check imaging, check verification, check collection and check guarantee services. For more information on T-TECH, visit their website at www.t-techcheck.com.

First Citizens Bank has 359 branches in North Carolina, Virginia and West Virginia. Headquartered in Raleigh, the bank has $11.15 billion in assets. First Citizens is committed to providing superior financial services to individual customers and small to mid-sized businesses. For more information on the bank, visit its website at firstcitizens.com

For more information on T-TECH: www.t-techcheck.com
For more information on First Citizens: www.firstcitizens.com

For more information, contact:
Lane Dunn
(919) 716-2632
First Citizens Bank