Wells Fargo and Key Bank have become the first two US banks to send electronic cheque image files to the Federal Reserve via the SVPCO-Image Exchange Network.
The electronic information exchange follows the connection of the public sector Fed to the privately-operated SVPCO infrastructure. Banks believe that they can significantly reduce item processing costs by sending image cash letter files instead of actual paper cheques to the Fed.
Mike Barnum of Key Bank, says: "With the Fed now on board, it is much easier for Key Bank to do full image cheque clearing. The SVPCO-Image Exchange Network offers the reliability and security to process a significant amount of image volume with the Fed."
In addition to the Fed, five of the nation's largest banks and a large third-party service provider are already using the Network. Most of The Clearing House's 19 bank owners are committed to linking by the end of 2005.
George Thomas, EVP of The Clearing House, says: "The early volumes being sent through the Image Exchange Network are significant, and we expect that to increase substantially in 2005."