Stats Show a Surge in Paying Banks Now Receiving Check Images

Some recent statistics indicate banks are making significant headway in their ability to receive and clear electronic check images. PaymentsNation, a major clearing house for checks and check images, reported this week that the number of routing and transit numbers (R/Ts) receiving check images reached 5,275 at the end of March, an increase of 20% in three months. Routing and transit numbers roughly represent paying financial institutions, though some institutions maintain more than one number. Dallas-based PaymentsNation, formerly known as NCHA/Pro, indicates the jump in receiving R/Ts bodes well for future image volume. “We expect to see our image volumes ramp up proportionately in April and the following months as additional R/Ts are added to the mix,” said Tom D'Aquisto, president of the clearing house's check services division, in a statement. PaymentsNation has not yet released statistics for April. Overall, some 13,345 routing and transit numbers were clearing check images as of February, according to the latest data from the Electronic Check Clearing House Organization, Dallas. That represents some 9,363 financial institutions, or 57% of all institutions in the country, ECCHO says. In February 2007, 7,500 R/Ts nationally were receiving images. ECCHO, which establishes rules for check-image exchange, gathers its numbers from PaymentsNation as well as the Federal Reserve, The Clearing House Payments Co. LLC, and local image-exchange networks. Electronic-payments experts watch closely the number of receiving financial institutions because it indicates paying banks' technical ability to clear images rather than substitute checks, the paper printouts of images authorized in 2004 under the Check Clearing Act for the 21st Century (Check 21). Banks that have not geared up their back offices to receive images require the printouts instead, which drives up costs for collecting banks. In line with the increase in receiving banks, ECCHO data show further progress in check electronification. Seventy-four percent of imaged check volume was cleared as images rather than as substitute checks in February, up from 62% a year earlier, according to ECCHO. Altogether, image volume came to 1.071 billion items, or 44% of all paid check volume in the U.S. PaymentsNation reports that 49.8% of the 742.4 million image items for which it provided settlement in the first quarter were cleared as images, a growth of fully 16 percentage points since the end of 2007. Separately, The Clearing House Payments Co.'s SVPCO Image Payments Network, the country's largest image-exchange network, reported last month that its first quarter volume reached 1.113 billion items, up 141% over the first quarter of 2007. SVPCO now processes for 25 financial institutions and has links to both the Federal Reserve and to Endpoint Exchange, a network belonging to Metavante Corp.