November 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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More than 12.3 billion annual check payments totaling $15.1 trillion per year have already moved from the traditional paper-based clearing process to improved image-based processes.

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On an average day during November 2007, more than 8,200 institutions received almost 36 million check images for posting.  These total 9.0 billion checks per year.

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This CheckImage Collaborative image clearing report reflects transactions settled through the Federal Reserve, PaymentsNation (formerly NCHA), SVPCO and local / regional exchanges.  When the same payments were cleared through two or more of these organizations, those payments were counted only once.

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The 2007 Federal Reserve’s Payments Study shows that the volume of checks (both written and paid) continue to be larger than debit card, credit card or ACH transactions.  The report also shows that the dollar amount of checks increased from 2003 to 2006 from $40 to $41.7 trillion.

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