The Pros and Cons of eFunds Corporation

In order to fully understand how the eFunds Corporation works it helps if you understand a little about economics. I like to describe the economy as one big giant sewer system made up of thousands of pipes that branch off of one another and lead to others. These pipes represent the flow of money. There is no end to the pipes; in fact, every pipe flows back to the place where it first began and continues on.

When it comes to eFunds Corporation, their role in the economy is to help giant financial corporations make more money while spending less. In fact, the role of eFunds Corporation in the overall scheme of things is to help wealthy corporations get wealthier.

This probably doesn’t paint a bright picture of the company; however, there are some positives and some negatives to eFunds Corporation’s purpose that need exploring. Let’s start with a broad overview of the corporation.

The eFunds Corporation consists of 13 subsidiaries, which are as follows:

• Penly, Inc.
• Loss Control Systems
• ClearCommerce Corporation
• National Check Protection Services
• India Switch Company Private Limited/ATM Management Business
• WildCard Systems, Inc.
• Delux Electronic Payment Systems
• ChexSystems, Inc.
• eFunds “Classic”
• Scan
• DebitBureau
• iDLX Technology Partners
• Oasis Technology, Ltd.

The range of services each subsidiary offers varies, but the one thing they all have in common is that their services provide banks and credit lenders with ways to save money and streamline operating costs.

If you’re currently in the position of trying to clear up a history of bad credit then you may be familiar with Chex Systems, Inc. If one of the reasons your credit is bad is because you abused a past checking or savings account - either by writing bad checks or overdrawing your account balance - and you never took steps to try and correct it with the bank, ChexSystems is the reason why no bank will let you open up another account.

ChexSystems compiles a database of all the individuals reported by banks to have abused their accounts. This database is then available to financial institutions so that they can can make the proper determination of whether an individual would be a high risk for account fraud. When an individual’s name shows up in the ChexSystems database, then it is a good possiblity they will be declined.

The ChexSystems database has been around since 1971 and remains a popular choice for banks more so than the three national credit bureaus because some high risk applicants don’t have a credit history which would allow a bank to make an informed decision. While it can be understood that a person trying to clean up bad credit may not like what ChexSystems does, (especially when you consider that even after steps are taken to clear up outstanding problems on a past bank account, the bank has the option of leaving your name in the database for as long as five more years), in the overall scheme of the economic world, ChexSystems provides a very useful service.

But ChexSystems, Inc. provides more than bank account fraud monitoring. The company also provides credit card companies with lists of debit profiles on you and other consumers. This is a service provided through their DebitBureau subsidiary which tracks the spending traffic of consumers. Credit card companies can in turn use this information to better target potential customers.

I admit that it can be disconcerting to find that someone is tracking your spending habits; however, they don’t know what you’re buying or where you’re shopping. They only see the amount and frequency in which you spend. The upside to this service is that it allows credit card companies to target their junk mail offers only at those consumers who they are sure would qualify. It also saves credit card companies from mistakenly issuing a card to those in the early stages of  bankruptcy who intend to run the limit up on the card and then charge it off.

Ultimately, even though you may not like this type of information floating around, it provides the advantage of saving credit card companies money by cutting back on the amount of materials they have to buy in order to issue their card offers, and it also keeps them from passing along the costs of bankruptcy write offs onto consumers in the form of membership fees and higher interest rates.

But ChexSystems, Inc. doesn’t stop there in its range of services. You may be surprised to know that they are responsible for inventing the convenience of allowing consumers to open bank accounts online. ChexSystems provides the software that allows banks the ability to approve your application and get the account open in a matter of minutes. People have less time to spend waiting in line at a bank to get their needs met and ChexSystems has provided a convenient way to save consumers time, as well as save banks money buy allowing them to cut back on the amount of staff they need to run the bank.

And because identity theft is becoming such a rampant problem in our society, ChexSystems also offers theft protection to consumers. This protection consists of:

• Weekly credit monitoring
• DebitBureau monitoring
• Yearly credit report
• Personalized protection plan
• Fraud alerts
• $20,000 in reimbursment to victims

Efunds Corporation and its subsidiaries span the globe. They are located in the United States, Canada, United Kingdom, India, and Australia. Their wide range of services can be found in the financial, retail, government, and telecommunications industries.

Are they a company that should be scorned? Maybe if you’re in the process of cleaning up your credit, but for everyone else, they are a company that provides services which help lenders and banks streamline costs and save money, which in turn allows them to pass the savings on to consumers so that they can spend more money and buy more things, and so that the sellers can pay their bills and buy more inventory and expand, etc…just like a big economic sewer system.