Check 21 is set to have a widespread impact on the payments industry in the US, say Ed Bachelder, director of research & analytics and Melissa Fox, senior research analyst at Dove Consulting.
On 28 October, 2004 — five days prior to the US presidential election — Check 21 will permit financial institutions to present a substitute cheque for payment using an image replacement document (X9.37-2004) as the legal equivalent of the cheque itself. This new payment instrument will usher in an age of electronic cheque image clearing and settlement.
In the short-term, Check 21 has the potential to introduce significant cost savings; longer-term, it is likely hasten the decline in cheque volume.
In this article, the authors explore the implications of Check 21 and provide a timeline for migration, as well as discuss the impact of that migration on various industry players and, ultimately, on cheque writing behavior.» Download the document now 143.1 kb (PDF)