Two industry ventures are cooperating to bring the processing of paper checks into the 21st century.
Viewpointe Archive Services, operated by Bank of America, JP Morgan Chase and IBM, has linked with SVPCo, a New York-based e-payments consortium, to form a national network to transmit and store images of most of the checks written in the United States.
Viewpointe already houses some 21 billion check images, or about 40 percent of the 49.5 billion checks written annually. SVPCo, which for several years has operated a switch by which banks can exchange check information electronically-a process known as electronic check presentment or ECP-has recently announced that it will expand its services to support full image exchange by early next year (see BS&T, Jan. 2003, page 9 ).
Through SVPCo, Viewpointe will be able to accept images from non-member banks. "When we accept image cash letters from them, they will be placed in the Viewpointe archive," said Grant Cole, senior vp of government and industry relations at Bank of America.
SVPCo provides the means for banks to swap images and Viewpointe provides the means to store them. "Each company is focused on separate, but eventually interdependent, exchange initiatives," according to Hank Farrar, president of SVPCo, which is owned by 20 of the largest banks.
"Given that many of the SVPCo owner banks also participate in the Viewpointe national archive, it is important that we work together to plan our image exchange efforts," he added.
Nine banks belong to Viewpointe: Bank of America, JP Morgan Chase, Fleet, SunTrust, U.S. Bancorp, First Tennessee, HSBC, BB&T and Zions Bank. Three of them-BofA, Chase and U.S. Bancorp-are also participants in SVPCo's image exchange program.
SVPCo enables Viewpointe and non-Viewpointe banks-many of which are contemplating building their own archives or using one built by the Federal Reserve-to communicate. "SVPCo has created a common network so each bank needs only one connection as opposed to 9,000," said Jennifer Lucas, a spokeswoman for Viewpointe.
Viewpointe offers banks a way to enjoy the economics of check imaging without incurring up-front capital expenses. But for those banks that prefer to build their own archive, SVPCo provides a way for them to communicate with Viewpointe and vice versa.
"It creates a connection between Viewpointe and banks such as Bank One and Wachovia," Lucas said. "If you go with your own archive, you can use SVPCo as your middleman."
The existence of Viewpointe and SVPCo is testimony to the paper check's durability in an age of electronic payments. The decline in the number of checks, while more pronounced in recent years, has been nowhere near as steep as some had predicted. Thus, the industry has found itself having to support a dual payments system-one paper and one electronic.
Viewpointe's raison d'etre is the creation of a national image archive to move check processing out of the horse-and-buggy era. Under the traditional system, a check is typically handled by up to 20 individuals throughout its life cycle. Each day, nearly 100 million checks are shipped between banks via air and ground transportation. The process of retrieving and photocopying a check image from microfilm costs between $2 and $6 per check and takes three to five business days, causing inconvenience for both the customer and the bank.
Viewpointe was launched in 2000 when Bank of America teamed up with Chase, which had already deployed a state-of-the-art solution using technology from IBM and with a capacity several times its own needs.
Viewpointe's philosophy has been "capture once, share on demand." After customers deposit checks at their branch or an ATM, the bank sends them to its core processing site, where images are captured via digital camera. After the checks have been cleared and settled electronically, the images are transmitted to the Viewpointe archive and stored in two redundant sites--Boulder, Colo., and Dallas-where they can be retrieved by the paying bank and its customers using standard Web browsers.
"The image gets placed out there once, then a cash letter and ECP file is sent to the paying bank," said Cole. "The paying bank can then access it as an on-us item."
With the expected passage this year of the Check Clearing for the 21st Century Act, banks will be free to transmit check images and destroy, or truncate, the original paper item.
Check 21 will pave the way for broader adoption of image exchange with truncation, said Cole. "You can do truncation without Check 21 by agreement, but it's very cumbersome. Check 21 allows you to present an image, even if you have to print it on a piece of paper to present to the paying bank."