Union Bank, National City Latest to Link to SVPCO’s Image Exchange

SVPCO, which began operating a national image-exchange network late last summer, today brought two more banks live on its system, bringing to nine the number of institutions and processors linking to the network. National City Bank, Cleveland, and San Francisco-based Union Bank of California are now trading check images through SVPCO, the electronic check-processing unit of The Clearing House Payments Co. LLC, New York. They join J.P. Morgan Chase & Co., KeyBank, Bank of America, Wells Fargo, Wachovia, The Federal Reserve, and Electronic Data Systems Inc. among those with connections to the image exchange. Most of the 19 owners of The Clearing House are expected to link up by the end of the year. These financial institutions, among the largest in the country, control more than 60% of the nation's checking accounts. Currently, SVPCO is exchanging about 60,000 image files each night, of which the bulk are ultimately delivered to paying banks as so-called substitute checks, or print-outs of the images (Digital Transactions News, April 15). These image-replacement documents have the legal status of the original checks thanks to the Check Clearing for the 21st Century Act (Check 21), which took effect in October. But SVPCO expects full-scale image exchange to ramp up quickly and overtake IRD production within the next two years. Meanwhile, the growth rate in SVPCO's exchange volume has led the network to decide to discontinue by the end of May its air-transport service for transit checks. The network flies 1.2 million checks per night, of which 780,000 are flown cross-country, rather than regionally. Originally, the network had planned to stop the service by year's end. SVPCO's image exchange is a peer-to-peer system that allows banks to trade images directly rather than through a central switch. It relies on technology, developed with VECTORsgi, a software company based in Addison, Texas, known as a distributed traffic agent, to route image files and other data.