ECHO Press Releases

FOR IMMEDIATE RELEASE
May 14, 2001

ECHO ACQUIRES ASSETS 
OF NATIONAL CHECK NETWORK 

Expands NCIS check database, enhances collection agency sales channel

May 14, 2001, Agoura Hills, Calif.-- Electronic Clearing House, Inc. (NASDAQ:ECHO) today announced it has completed the acquisition of the assets of National Check Network (NCN), including the association’s name.  NCN is an association of 60 collection agencies that contribute to a proprietary database of check writers populated by over 3 million records.

The acquisition strengthens ECHO’s position as the operator of the National Check Information Service (NCIS) check verification system.  Combining NCN’s data with existing NCIS data will expand the database to 15 million negative check records. The acquisition also expands ECHO’s collection agency sales channel significantly.

 “The acquisition of NCN completes a key part of our strategy that ECHO has pursued for the past two years ‑ to build the nation’s very best database of bad check writers,” stated Joel Barry, CEO of ECHO. “Value in the check verification business is generated by the accuracy and timeliness of check writing data. The combined NCN and NCIS data, which is collected daily from over 260 collection agencies around the United States, will result in the most powerful and effective national database available to merchants today.”

“By accessing our enhanced NCIS database, a customer will be more likely to have their check approved, a merchant will experience fewer checks being declined, and, on those checks that do bounce, a collections agency will enjoy a better rate of collection. ECHO’s relationship with a nation-wide network of leading collections agencies makes this possible. NCIS is a working database used by collections agencies to track bad check writers and motivate them to pay their obligation. This creates a strong incentive to quickly remove any person from the database who has made good on their bad check. Timely updating of the database has positive implications for the check writer, the merchant and the collection agency,” stated Barry.

The addition of the NCN group of collection agencies and data also adds value to ECHO’s recently introduced check product, Electronic Check Conversion (ECC). ECC is a process whereby a merchant can convert a check into an electronic record at the point of sale and then return the paper check to the customer. ECHO’s ECC system also captures an image of the check itself, which in the event of a collection action, becomes a very powerful tool to locate the bad check writer and convince them to honor the check.

For merchants using non-imaging ECC systems offered by third-party vendors, accessing the NCIS expanded database before accepting a check allows a merchant to be as confident as possible about the quality and history of the check writer. Most importantly, it diminishes the number of times a merchant will experience a bounced check transaction.  

“Now that we have the premier negative check writer database, we are focused on what we believe are the two remaining strategic keys to becoming the nation’s top check service provider, expanding our management team and building our sales and marketing organization. The collection agencies represent a great sales channel to reach local merchants, because they are a primary point of contact for check services and understand the role that technology plays in efficient and successful collection actions. We intend to leverage these relationships to gain market penetration for several new check products and services that address the needs of merchants in today’s economic environment,” Barry concluded. 

Electronic Clearing House, Inc. provides debit and credit card processing, check guarantee, check verification, check conversion, and inventory tracking to over 58,000 retail merchants and U-Haul dealers across the nation. 

To take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, you are hereby cautioned that this release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties.  Actual operations and results may differ materially from those expressed in the forward-looking statements made by the Company.

Media Contact:
Donna Rehman, Corporate Secretary
(818) 706-8999, ext. 3033 or corp@echo-inc.com

Press Releases are also available by calling (800) 233-0406 ext. 3033, or by email to corp@echo-inc.com

2001
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Electronic Clearing House, Inc. (ECHO)
28001 Dorothy Drive
Agoura Hills, CA 91301

Phone: (800) 233-0406
Fax: (818) 991-5973
E-Mail: echo@echo-inc.com
URL: http://www.echo-inc.com