March 2007

Key Messages:

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Paper checks are being transitioned to electronic images of checks at a pace that is unprecedented.  Check images are currently collected in two forms, as substitute checks and as check images.

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Substitute checks assist in evolving traditional paper check clearing to image-based clearing.  As a precursor to full check image exchange, the number of substitute checks is a positive indication of the acceptance of image exchange.

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Just 29 months after the effective date of Check 21, 7 billion check payments totaling $9.4 trillion per year have already moved from the traditional paper-based clearing process to improved image-based processes.  Based on the 2004 Federal Reserve Payments Study, that amount is more than four times greater than the sum of all debit card payments ($.6 trillion) and all credit card payments ($1.7 trillion).

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On an average day during March 2007,  almost 6,800 institutions received 17.9 million check images for posting.  These total 4.5 billion checks per year.

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This Federal Reserve / ECCHO industry image clearing data reflects transactions settled through the Federal Reserve, NCHA and SVPCO.  When the same payments were cleared through two or more of these organizations, those payments were counted only once.

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