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Electronic Processing: Closer Than Ever!

Electronic clearing of checks is growing at a rapid rate - more than 600 percent since 1998. In that year the Small Value Payment Company (SVPCo) was created by 12 of the nation's major banks. Most recently, SVPCo added another large financial institution to its ranks, which now number 20 owners, and added three new members, which will take advantage of the system.

SVPCo is a multilateral electronic check presentment system that uses information gathered from checks at the point of presentment to clear or reject checks electronically in real time before the paper check arrives at its eventual location. The depository bank captures payment information from the MICR line and immediately transmits the information electronically to the paying bank. The paying bank then posts transactions from the electronic information, identifies checks to be returned, and immediately notifies the depository bank. Currently, the system covers about 60 percent of U.S. commercial bank deposits active in electronic check presentment. Hopes for the future are to create a centralized check image archive.

Added to the ranks of owners recently was National City Bank Corporation, Cleveland, one of the nation's largest banks. Added to the ranks of members were Central Carolina Bank of North Carolina, First Tennessee National Corporation of Memphis, and Sterling Bancorp of New York.

Copyright © 2001 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 11, No. 12, 12/01

First published on 12/01/2001

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