Viewpointe Adds to Momentum Behind Web Links for Image Exchange

Seeking to solve what the electronic-payments business calls the “last-mile” problem in image exchange, Viewpointe Archive Services LLC on Tuesday launched technology that allows small banks to link via the Internet to its Pointe2Pointe image-exchange network. In this way, banks can rely on existing Internet connections to use the network, doing away with the need to install dedicated telecommunications connections, the company says. Viewpointe has become the second network controlled by large banks to introduce Internet connectivity to induce smaller institutions to participate in image exchange. SVPCO, an electronic check-processing unit owned by The Clearing House Payments Co. LLC, New York City, unveiled a Web-based connection in November 2006, allowing small banks to link to its image-exchange network through a much less costly gateway controller. The urgency to reach small banks for image exchange is underscored by the expense of dealing with substitute checks, the paper printouts of check images that are authorized under the Check Clearing Act for the 21st Century (Check 21). These paper printouts are costly for banks of first deposit, but are necessary when paying banks are unable to receive images. Approximately 60% of all financial institutions in the U.S. are now clearing check images, according to the Dallas-based Electronic Check Clearing House Organization. Viewpointe's new connectivity option means banks can start sending check-image files into the network for clearing within about a month, says Diane Scott, chief sales, marketing, and product officer at Viewpointe. “It's much easer and quicker,” she says, adding the company introduced Web-based transfers because “we realized we didn't really have a solution that would be easy and simple for a smaller institution.” Not only has image exchange required dedicated phone lines, but it has also laid claim to personnel and budget allocations many small banks can't afford to spare, she says. “There is a challenge for these institutions,” she says. Scott says the Internet is most efficient for banks processing 75 million or fewer images per year. At volume levels above that threshold, Internet connections tend to choke on the bulky check files, slowing down transaction times. “Once you get beyond 75 million, an Internet connection would not give [small banks] the delivery they're looking for,” she says. Altogether, Viewpointe handled 1.29 billion images in the first five months of this year, up 54% over the same period in 2007. The company, which operates a massive check-image archive and offers an on-demand image-sharing service as well as an image exchange network, does not break out volume for the two services. Scott will not discuss pricing for Internet connectivity other than to say it is on a per-transaction basis. “Institutions will only pay for what they use,” she says. There are no fees for implementation. While Scott acknowledges that Viewpointe's new service is “similar” to the one introduced more than 18 months ago by SVPCO, she says the two efforts indicate the seriousness with which the industry is trying to close up the “last mile,” the final link in the image-exchange chain leading to the paying bank. Similarly, says Nancy Atkinson, senior analyst at Aite Group LLC, a Boston-based research firm, “I guess you could say Viewpointe is catching up.” But, she adds, “it's good for both networks to reach as many institutions as possible.” Such reach, she says, allows big banks to avoid making substitute checks and brings the efficiency of electronic processing to smaller banks. Viewpointe is owned by Bank of America Corp., U.S. Bancorp, IBM Corp., JPMorgan Chase & Co., SunTrust Banks Inc., and Wells Fargo Co. It maintains offices in New York City as well as Parsippany, N.J., and Charlotte, N.C.