Endpoint Exchange Network launches Check 21 pilot with Fiserv, M&I and Intrust

The Endpoint Exchange Network believes the pilot will create a model for enabling it to deliver substitute checks or image replacement documents (IRD) on behalf of its 4,000+ participants. INTRUST and M&I, both members of The National Clearing House (NCHA), will settle the transactions through NCHA, the nation's largest check settlement organization, taking full advantage of the new Check Clearing for the 21st Century Act, known as "Check 21".

Under the pilot, check images captured by INTRUST are routed to the Endpoint Exchange Network for exchange. Checks payable on non-Endpoint Exchange participants are forwarded to Fiserv, which routes them into its national image distribution and substitute-check print network. Fiserv then prints substitute checks and presents them on behalf of M&I Bank. The transactions are then settled by NCHA through Federal Reserve Net Settlement Services.

The Endpoint Exchange Network is working with Fiserv to serve as an IRD print partner for any Endpoint Exchange Network participant to submit images of any check for clearing. For the INTRUST pilot, Fiserv is printing substitute checks at its Atlanta check-processing facility. The Endpoint Exchange Network plans for this initiative to enable its 4,000+ participants to transmit check images and create substitute checks to settle transactions for checks drawn on non-participating financial institutions.

With Check 21, a substitute check, or IRD, is the legal equivalent of an original paper check and may be printed at any point during the collection process. The printed substitute check contains an image of both sides of the original check and must be printed with MICR ink.

"Through participation in the Endpoint Exchange Network and membership in the NCHA, using Fiserv's national footprint for distributed print capability for substitute checks, financial institutions will be able to forward present 100 percent of their transit check volume electronically to reduce float and transportation costs, as INTRUST is doing today," said Mark Craig, general manager of CheckClear LLC, which operates the Endpoint Exchange Network.

Mark Damico, president of the Fiserv Item Processing Group, said the arrangement enables Fiserv to use its vast network of check-processing facilities to help push implementation of Check 21, a law designed to encourage innovation in check clearing. "The financial industry is moving steadily toward image exchange, but paper checks will still be used for clearing by many financial institutions as they work out their strategies for the future," Damico said. "We are pleased to be able to provide this valuable service to financial institutions to help make the future of Check 21 and full and efficient image exchange a reality."

"M&I is excited to participate in this electronic initiative with NCHA and The Endpoint Exchange Network. This initiative is part of our commitment to be a leader in the electronic check presentment process," said Guy R Ringle, senior vice president of M&I Support Services Corp, the payment services division of Marshall & Ilsley Corporation.

Fred Redeker, president and chief executive officer of the NCHA said, "This is an excellent demonstration of key industry service providers working together toward common industry goals including the advancement of check image exchange."

Jim Simon, vice president of operations at INTRUST Bank stated, "As an early implementer of image technology in banking services, INTRUST Bank is pleased to be a part of this leading effort to expedite the collection of checks while helping create greater efficiencies in the payment system. These efficiencies will include earlier detection of fraudulent items to protect the banking system and its customers."