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Lockboxes Ramp Up Technology

As checks taper off, banks are processing more electronic payments.

By Susan Kelly | Updated on September 09, 2015
The number of payments made by check is declining, but lockboxes, the bank facilities that process payments for businesses, are keeping busy. The demand for their services is coming partly from companies that used to process their own payments but decided they could benefit from using a lockbox instead. Lockboxes are also increasingly processing electronic payments in addition to paper checks.

An Aite Group report released last year estimated that retail lockbox, which handles consumer payments to businesses, is growing 0.4% a year as more consumers pay bills online, while wholesale lockbox, which deals with business-to-business payments, is growing at a compound annual rate of 2.9%.

Nancy Atkinson, a senior analyst at Aite Group, said that while the use of checks is not growing, lockbox volume is getting a boost as companies that previously handled their receivables in-house decide to outsource that work, perhaps because they’re impressed by the efficiencies offered by increasingly automated lockboxes.

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