Digital Transactions Authoritative, insightful and timely information for payments professionals
Image exchange and image clearing kicked into a higher gear in January, with more than half a billion items flowing through image-exchange networks for the first time. Just over two years since the Check Clearing Act for the 21st Century (Check 21) became effective, the volume of checks converted to images for processing hit 552.1 million, up more than seven-fold over January 2006, according to the Electronic Check Clearing House Organization, Dallas, which tracks image exchange. ECCHO estimates 18% of all checks paid now flow through image exchange. The volume of items cleared by paying banks as images also hit a new high, with some 341.2 million items settled without the reconversion into the paper substitute checks authorized by Check 21. The volume of these substitute checks, at 210 million, is a new record but represents the smallest percentage yet (38.2%) of overall image volume, according to the ECCHO figures. Substitute checks are printouts of check images and are necessary for banks that aren't equipped to clear images. Lending impetus to the trend toward image clearing is the steady growth in the number of banks able to receive check images. The number of routing-and-transit numbers open to image receipt reached 6,591 in January, more than double the number a year earlier. ECCHO figures this represents just over 6,000 banks, indicating that approximately 36% of all U.S. financial institutions are now handling check images. Collecting banks are also apparently sending more consumer checks through image exchange networks, as the average dollar volume per check has dropped dramatically since January 2006, to $1,455 from nearly $4,000. The growing ability of paying banks to receive and clear check images is good news for the banking industry, which is struggling to find ways to convert paper processing to electronic handling. A paper check costs collecting banks 6.6 cents each to handle, while substitute checks aren't much cheaper, at 5.9 cents, according to researcher Global Concepts, Atlanta. An item cleared as an image, by contrast, costs the banks just 2.7 cents. A rules-setting organization for image exchange, ECCHO gathers data each month from the operators and settlement houses for all the major networks, including The Clearing House Payments Co. LLC, which operates the SVPCO system; the Federal Reserve; and the National Clearing House Association, which provides settlement for several networks, including Endpoint Exchange and Viewpointe Archive Services LLC.
