Deluxe Financial Services debuted a new direct-check service today in which it will sell checks to bank customers.
Deluxe, which has traditionally sold checks through financial institutions, will now offer them directly to account holders through its DeluxeSelect program. It will provide customer service, support, sales and product knowledge.
The program will help banks not only because they get a percentage of sales, but because their customers benefit from dealing with a check-printing specialist, Deluxe management told DIRECT.
The average margin on a check order is $5.65 per bank, said Chuck Feltz, president of Deluxe Financial Services. An 18-month pilot program demonstrated that Deluxe can double the margin the banks realize, Feltz said.
Part of the reason is that Deluxe can upsell the customer products such as licensed image check designs and leather checkbook covers.
“We can increase the banks’ revenue, decrease their costs and increase their customer satisfaction level,” said Lawrence J. Mosner, chairman and CEO of Deluxe Corp.
Deluxe will place order forms in bank customers’ check boxes. “We’re going to do about 60 million consumer packages this year,” Mosner said.
The company will take orders from a 700-agent call center, over the Internet at (www.deluxe.com) or through the mail.
The pilot program showed that almost half of the customers preferred to order through an automated telephone service, while 35% chose to speak to live reps. The remaining 25% ordered over the Web.
Sales agents sign up banks for the program in person.
With more people paying bills online, how long will Deluxe’s service be appealing? “Sixty percent of non-cash payments are still done with paper checks,” Mosner said. “There will be a gradual decline in checks ordered, but we feel we can increase revenue and increase profit for about three to five years.”
DeluxeSelect was unveiled to the company’s top 100 bank customers at a showcase at the Sheraton Chicago.
Mosner tipped analysts off to the plan in a phone conference in January (DIRECT Newsline, Jan. 31, 2002). He acknowledged that the paper-check field had “peaked and started a gradual decline,” and that Deluxe needed to find new revenue streams.
The firm also sells checks by direct mail, and through its business services unit.
The firm’s Financial Services unit, which markets checks through banks, generated $54.6 million in net income during the second quarter of 2002–a 28.5% increase over the same period in 2001. The unit reported revenue of $192.3 million for 2001, compared with $187.1 million the year before.
Deluxe Corp. is located in St. Cloud, MN.
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