Processors Report Major Leaps for Image Exchange So Far in ’07

After months in which banks struggled to cope with the technology and rules surrounding image exchange, check processors so far in 2007 are reporting remarkable leaps in image-exchange volume. The nation's largest image-exchange network reported Monday its March volume hit 177.4 million items, up 507% over March 2006. Volume was up 24% over the 143.4 million images handled in February, SVPCO's Image Payments Network, part of The Clearing House Payments Co. LLC., New York, said. This jump followed a leveling off which saw February's volume climb less than 2% from January. “Image volume continues to grow nicely…as participating financial institutions increased both the number and dollar value of check images processed through the system,” said Susan Long, a senior vice president at The Clearing House, in a statement. The network links 18 banks, including some of the largest in the country, as well as the Federal Reserve. Meanwhile, the National Clearing House Association on Monday said it handled 182 million imaged items in March, up nearly ten-fold from March 2006. That volume accounted for 34.8% of total settled volume, the Dallas-based processor said. The NCHA handles settlement for several image-exchange networks, including national networks Endpoint Exchange and Viewpointe Archive Services LLC. For the first quarter, volume was up 1,250%, reaching 501.7 million items. With image exchange, banks trade electronic images of checks for settlement, rather than the original paper items. In some cases, paying banks convert these images back into paper documents, known as substitute checks, before clearing them, as allowed under the Check Clearing Act for the 21st Century (Check 21), which became effective in 2004. Originally, the bulk of image-exchange volume turned into substitute checks, a fact that worried a number of major institutions that counted on image-exchange to slash paper processing costs. In recent months, however, as image-exchange networks have expanded, the volume of images accepted and settled as images by paying banks has caught up with and exceeded the volume of substitute checks. In January, items cleared as images accounted for 62% of the month's total volume of 551.3 million, compared with 24% of 73.1 million items in January 2006, according to numbers compiled by the Electronic Check Clearing House Organization, which gathers statistics from SVPCO, the Fed, and the NCHA.