Does that mean you have a financial problem? Not necessarily, said Hope Frazier, an account executive who specializes in electronic checks at Cornerstone Credit Services LLC.

To Frazier, it means you've written one of more than 200 million electronic checks that could be processed in the coming year.

Electronic check readers scan a consumer's paper check, convert the information to a digital form, process that data against a system database, snap an image of the document itself, and return the voided-out paper to the writer, Frazier said.

Buying a reader usually costs around $1,500 and they operate with a $0.25 to $0.35 per-check processing charge, depending on the company's size and volume of check it accepts. It's a form of payment that is growing in popularity among buyers and sellers alike.

In 2001, U.S. consumers processed more than 200 million electronic checks, according to the National Automated Clearing House Association. Of those checks, some 88.7 million came from point-of-purchase sales. NACHA, as the clearing house is known, represents more than 12,000 financial institutions and 650 organizations, according to its Web site.

In Alaska, the number of businesses that use the technology is small but growing, said Greg Gillquist, the vice president of marketing at Cornerstone Credit. His company is the only firm in the state that sells and manages electronic-check equipment, and -- although the company's e-check client base is only about 24 companies in Alaska -- he is confident that the technology will play a pivotal role in future commerce.

"We're becoming a paperless society," Gillquist said. "We believe in the need to keep up on the latest and greatest in check debt recovery, and this is it."

E-checks began their journey from concept to cashier over 20 years ago, said Nancy Grant, the senior director of electronic checks services at NACHA. But, she noted, the payment system became a reality in 1999, when the technology was developed, the regulations were drafted, and the pilot scanners were ready to be launched.

Grant said the equipment increases the convenience and usability of check-writing for both consumers and retailers. They cut down on the possibility that a check may be fraudulently used, reduce the number of returned checks that a retailer will receive, and expedite management, she said.

"It's a marriage of how customers wanted to pay and merchants' needs to lower their costs," she said. "It reduces the time needed to get reimbursed for the check, it reduces the amount of time that merchants spend processing checks."

Kathi Cinkowsky, the owner and president of the McDonald's of Fairbanks and North Pole, is one of the state's e-check compatible merchants.

"I love it, I think it's wonderful," she said. "It makes the process a lot easier."

Cinkowsky, who launched the equipment in March 2002, said it helped streamline the administrative process for her staff by reducing the paperwork and filing that must be done every night. There is less to do in terms of clearing, endorsing and processing the checks before they are sent to the banks.

She added the number of bad checks written to the restaurant has been slashed.

"We went from getting back four or five bounced checks per week to four or five per month," Cinkowsky said.

While the new check readers were embraced by her staff, Cinkowsky said there was some initial confusion about the process among the clients. With time and exposure, however, that has essentially gone away.

"Occasionally, someone will still be baffled by what is going on, but most understand the process by now," she said.

Adding the check reader, which plugs into a telephone line, increased the number of payment options available to Cinkowsky's clients, since she purchased terminals that are compatible to credit and debit cards, as well. Frazier noted that the credit machines and e-check processors can run off of the same line, since they operate using a similar dial-up method.

Increased convenience is a minor benefit compared to the increased security that electronically-processed checks provide to the user, NACHA's Grant said.

"There is much more security for the client though electronic checks then through regular checks," she said. "On average, 12 people handle a (paper) check during its processing, and they all have access to the information on that check. Customers recognize that, once an electronic check is handed back, nobody else is going to see it."

NACHA established further regulations to provide a client with increased protection, under the new equipment. A client claim of fraudulence must be immediately rectified and any pending investigation has to be done within a set time. Grant said electronic-check regulations are designed by a federal agency to protect consumers, whereas paper check laws are governed by the state and are designed to facilitate commerce.

Gillquist said, in regards to the new technology and the rights that go along with it, one of the most important things both consumers and retailers can be is educated. Restaurants in the state have placed small, tent-shaped placards on their tables, explaining what will happen if a check is written, and Cornerstone Credit offers training and customer support for companies that are interested in the payment method.

Despite the advantages of the system, Gillquist said many corporations are still hesitant about changing to electronically read checks.

"One of our biggest frustrations is that people don't take advantage of this technology," he said. "The technology makes the store, as well as the buyers, accountable."