The Small Value Payments Company (SVPCO), an electronic payments and processing service owned by 22 US banks and The Clearing House, has launched its cheque image exchange network following a two-month test period with JPMorgan Chase and KeyBank.
SVPCO's image exchange network enables financial institutions to clear and settle cheque images directly or through other parties.
Participants can exchange files peer-to-peer through a secure network, while activity and summary information is exchanged centrally through SVPCO for management reporting and settlement services. The system also supports the exchange of electronic data and image for forward presentment, return items and IRD printing.
The initial exchange between KeyBank and JPMChase was managed at a controlled volume level to fully test the operations at each bank. The banks expect to continue to exchange a growing number of electronic cheque data and image cash letters, increasing volumes throughout 2005.
Mike Barnum, executive vice president, KeyBank, comments: "The exchange of images has been a very valuable experience for Key and demonstrates the effectiveness of our new systems in displacing paper cheque processing and in ensuring that issues that could arise between two exchange banks have been addressed. It's clear that as we increase our volumes to a higher production level, the benefits will be significant."
Financial institutions can connect to SVPCO's payments system network through a direct distributed traffic agent (DTA) on their site, through the SVPCO Gateway shared access DTA or through a correspondent bank, third party aggregation node, or the Federal Reserve.
SVPCO says electronic cheque image exchange is expected to save US banks $2.1 billion a year in operational efficiencies and lower costs.