Moving Closer to Wide-Scale Check 21 Adoption

Jeremy Quittner
American Banker, March 22, 2005

Following are excerpts taken from the March 22, 2005 edition of American Banker.

Though implementation of the Check Clearing for the 21st Century Act has been slower than expected and most experts do not foresee mass exchange of check images for at least two years, many of the top 20 banking companies have been quietly experimenting with Check 21 technology and laying the groundwork for a more wide-scale adoption.

They have experimented mainly with back-end image capture, image capture at branches, and remote image deposit for their corporate clients.

Remote image deposit lets corporate clients create electronic images of checks they want to deposit, but at the corporate site. They then transmit the files to the bank, eliminating the need for a bank branch visit.

KeyCorp has been involved in direct check image exchange with JPMorgan Chase & Co. since August 2004, also through SVPCo.

The Fed will print image replacement documents. The use of IRD is seen as an intermediary step in the development of Check 21 technology; it entails printing a substitute paper document rather than moving into a purely electronic environment.

Many of the largest banks are working with one or both of the member-owned and -operated outfits that help banks exchange or view check images: SVPCo, and Viewpointe Archive Services LLC. Most smaller and midsize banks are using Endpoint Exchange Network, a direct-exchange system operated by the CheckClear LLC unit of the Milwaukee banking company Marshall & Ilsley Corp.

The recent spate of large bank mergers has slowed Check 21's progress, because many of the largest banks seen as key players in spurring adoption have been focusing on integrating the banks they just bought, Mr. Hicks said.

Wells Fargo is one of the few major banks pushing check image capture at branches. It wants to capture check images through tellers rather than the back office, which could quicken conversion to electronic images. Wells recently signed a contract with Check 21 vendor Carreker Corp. of Dallas for that technology.

"We have purchased software that will help facilitate the image capture at the teller lines," said Mitch Christensen, Wells' executive vice president of payment strategies.