Fed Sending Check Images Via SVPCO Image Network

The Fed sent its first images to National City Bank through the Image Payments Network and expects to send more check images to additional banks in coming months. The Fed first linked to the Image Payments Network in February 2005 to receive images. Since then, the Fed has received check images from 10 banks, up from two initially, and more are expected.

"The Federal Reserve's participation in the Image Payments Network, along with the participation of an increasing number of banks, reinforces the fact that image exchange is no longer a vision, but rather a real strategic opportunity to streamline operations and reduce costs," said Susan Long, Senior Vice President of The Clearing House, responsible for SVPCO-Electronic Clearing Services.

"The Fed's ability to send images through the Image Payments Network will accelerate the movement toward image exchange and underscores the important role that the Image Payments Network is playing in this new era of digital check images."

The Federal Reserve/SVPCO-Image Payments Network connection expands the options available to institutions across the country seeking to take advantage of the efficiencies of digital image technology as image cash letters can be cleared to any financial institution in the country.

"The Federal Reserve/SVPCO-Image Payments Network connection is enabling a growing number of financial institutions to clear electronic items in a safe and secure environment," said Fred Herr, Senior Vice President with the Federal Reserve Bank's Retail Payment Office. "The Federal Reserve/SVPCO-Image Exchange connection also continues to promote payment system efficiency by eliminating the need to establish redundant infrastructure to clear image cash letters."

n addition to the Fed, 12 of the nation's largest banks and EDS, a large third-party service provider, are using the Image Payments Network. Banks participating in the network include Bank of America, Comerica Bank, Fifth Third, HSBC Bank USA, JPMorgan Chase & Co., KeyCorp, LaSalle Bank, M&T Bank, National City Corp., Union Bank of California, Wachovia Corp., and Wells Fargo.

How the Image Payments Network works

Image exchanges and settlement are conducted through SVPCO's Distributed Traffic Agent (DTA), a solution developed by SVPCO with VECTORsgi, one of its strategic technology partners. The DTA enables financial institutions to transmit check images directly to each other cost-effectively and without cumbersome centralized data processing. The DTA works in conjunction with existing item-processing systems to link institutions into the network and enables institutions to directly exchange payloads of electronic images.

All financial institutions that exchange images directly with each other via the Image Payments Network utilize the automated settlement function. Automated settlement provides real-time net and bilateral settlement position reporting and eliminates the manual intervention required with other settlement arrangements. Financial institutions can see their net debit or credit position online and view their position with all of the institutions participating in the Image Payments Network at any time.