The Electronic Fund Transfer System (EFTS)

The Electronic Fund Transfer System (EFTS) is an electronic bill-payment system created at the University of Connecticut Health Center (UCHC) in Farmington. The program was developed and implemented on a regional basis in 1996 to replace a prepaid coupon system utilized by DOCLINE libraries. Health sciences libraries use EFTS for payment of interlibrary loan (ILL) transactions. Centralized electronic billing of participants greatly reduces the need to create invoices and to write reimbursement checks for ILLs and document delivery among participants.

OVERVIEW

EFTS functions similar to a debit card system: It operates as though the loaning library is the retailer, the borrowing library is the consumer, and EFTS is the clearinghouse service that enables the financial aspects of the transaction. Participants enroll in EFTS by placing funds on account at UCHC to cover the costs of their transactions. A fundamental principle of the system is that the reciprocal of a loan is a borrow. Consequently, only lending libraries that wish to collect for their service need to file billing information with EFTS. About 20% of the participants submit files. The rest of the participants monitor their account balances and submit additional funds when necessary. The files are processed as they are submitted, with lenders' accounts credited and the corresponding borrowers' accounts debited. The lender pays a fee based on the amount collected on their behalf.

OPERATIONS

The primary benefit for EFTS participants is the simplification of and reduction in expenses associated with payments for ILL charges compared to direct invoicing. Additionally, EFTS encourages resource sharing by reducing uncertainty about billing when a library considers an ILL transaction with an unfamiliar library. Unfamiliarity often results from geographical location. As a clearinghouse for bill payment, EFTS increases each library's ILL options by allowing the library staff member to focus on item availability and service considerations and not on receipt of payment.

EFTS is an individual transaction billing system; it allows the loaning library to charge whatever it chooses for each transaction. Lending libraries can submit files in a variety of ways. An ASCII-based text file can be generated by such third-party ILL management programs as QuickDOC, Clio, and ILLiad. For lenders who do not use such programs, a small program can be downloaded from the EFTS Website* that will assist in creating the transaction file.

A 3% service fee is currently deducted from the lender for each transaction to cover EFTS operational costs. This fee is analogous to the bank charge a retailer pays for debit card account management.

EFTS participants are now in all eight National Network of Libraries of Medicine (NN/LM) regions, including 48 of the 50 states (Figure 1). EFTS was implemented on a regional basis by the New England (1996), Mid-Atlantic (1998), and South Central (1999) Regions. This implementation resulted in an immediately recognized billing standard for those regions. The EFTS Website contains instructions for joining, policies, and procedures as well as a current participants list.

Figure 1.

Electronic Fund Transfer System (EFTS) participants (April 2004)

Looking at 2004 first-quarter data, 85% of the members saw account activity, with 1% of them strictly lending, 70% strictly borrowing, and 29% both lending and borrowing. EFTS has become a substantial benefit to those net loaning libraries in that they maintain a positive cash flow because of EFTS. Those libraries whose lending exceeds their borrowing can elect to receive a check—issued quarterly in January, April, July, and October—from EFTS drawn on their account for the difference between their account balance and the minimum needed to cover their own borrowing activity. The first quarter of 2004 saw 50 libraries receiving a total of $495,000 in redistributions. The regularity of quarterly payments allows for accurate income projection and forecasting compared with the irregularity associated with the collection process when paper bills are sent to multiple potential payers.

A primary strategic goal for EFTS has been to meet the needs of the NN/LM DOCLINE community. Table 1 indicates a current snapshot of this relationship.

Table 1 Electronic Fund Transfer System participants by region

Regions 1, 5, and 8, where EFTS has been in use the longest, have an average 69% EFTS participation rate for active DOCLINE libraries. Were this percentage applied to the total number of active DOCLINE libraries in the United States (2,899), the potential domestic growth for EFTS is 2,000 institutions or more than double the current level of participation.

EFTS has an Advisory Committee that meets via telephone conferencing to review program policies and procedures. Each region of NN/LM is represented with a hospital librarian, a medical school librarian, and the regional network development coordinator. The Advisory Committee roster is on the EFTS Website.

COMPOSITION

NN/LM consists of libraries of various types and functions. A library can be classified as academic, hospital, or other and function as a Regional Medical Library, Resource Library, Primary Access Library, or other. Participation in EFTS spans all of these areas. Figure 2 indicates EFTS participation by type.

Figure 2.

EFTS participation by type

Ammon Ripple from the Children's Hospital of Pittsburgh told EFTS, “We fill 150–250 DOCLINE requests every day. Using EFTS in tandem with QuickDOC helps us take care of most of our billing in just 15 minutes a month instead of the many, many hours it used to take to process all those checks and invoices!! EFTS not only saves us time and money, but helps us provide better service to our ILL customers.”

Even smaller libraries have found EFTS beneficial, as Pat Davis from Falmouth Hospital, Massachusetts, indicated, “I am the only person in a small hospital library, so I truly appreciate the ease and convenience of using EFTS over paying individual invoices from libraries who charge for ILLs.”

DEVELOPMENTS

In August 2002, the National Library of Medicine awarded UCHC a 36-month contract to implement EFTS on a national basis. During the first year, the EFTS staff actively promoted EFTS by attending regional meetings, obtaining the support of network coordinators at each of the 8 Regional Medical Libraries, updating EFTS resources, establishing the EFTS-L email discussion list, and preparing for development of a Web-based system upgrade.

During the second year, the National Library of Medicine became an EFTS participant. Ralph Arcari and Edward Donnald were awarded the Thomson Scientific/Frank Bradway Rogers Information Advancement Award at MLA '03 in San Diego, California, for their work with EFTS. The Web-based EFTS was rolled out in January 2004. Participants were assigned secure online accounts, where they could check their account balances, make deposits, monitor transactions, and upload billing files at their convenience.

Financial self-sufficiency is the strategic objective for EFTS. The National Library of Medicine is committed to supporting EFTS until this objective is met. The goal for EFTS now is to maintain the extremely reasonable service fee for the services provided in the interest of increasing EFTS participation. If readers have any questions or would like to discuss EFTS participation, they may contact the office.