EDS Enhanced Check Clearing and Payment Services offering changes paper checks into IRDs as early as possible in the payment clearing and settlement process, increases security and speed and ultimately lowers costs to facilitate payments.

This agreement comes at a critical time in the financial services industry as institutions prepare for the implications of the new Federal government Check 21 legislation. Check 21 grants substitute checks that meet certain criteria the legal equivalent of the original paper version, allowing images to be transported electronically and printed locally as IRDs.

"The National Clearing House is a leader in working with the financial industry on the transition from paper check to image exchange. One of the key components involved in image exchange and the presentment of image replacement documents is settlement," said Jim Lansing, Senior Vice President, Wells Fargo Bank and NCHA Chairman of the Board. "Our national efforts including this effort with EDS and the industry movement toward a national settlement platform using NCHA creates an exciting opportunity for the payments industry."

Member Benefits

NCHA services include local, regional, and national check clearing and settlement (for checks and check images), joint transportation programs and risk management initiatives. Settlement services are also extended to other clearing houses across the country. The agreement with EDS strengthens the portfolio of services they provide to their members, who will realize the following benefits:

- Decreased costs
- Increased revenues
- Reduced payments system risks
- Simplified administrative processes

The agreement also provides members with a voice in the continued development of a private sector infrastructure to facilitate innovations in the national payment system.

"This is a watershed agreement for EDS and NCHA because we have an ability to drive transformation in the financial payments marketplace," says Mike Koch, director of Global Payment Services for EDS. "This agreement demonstrates EDS' commitment to address the changing dynamics in the financial industry with leading-edge solutions to assist organizations as they respond to Check 21."

EDS will provide the following services to NCHA: Enhanced Check Clearing and Payment Services which consists of the application, technology and platform for Image Exchange and IRD. The platform runs on an application under which check images and magnetic ink character recognition (MICR) data are transmitted to an EDS central site where clearing decisions are made and executed. Processing capabilities include distributed Image Replacement Document (IRD) printing at one of EDS' network print centers for efficient clearing and image exchange.

These services are powered by NetDeposit(R) - a software application that facilitates the capability for Image Exchange, ACH and IRD creation of monetary items. In a high-speed transport model, the application takes images and MICR files in a standard X9 format at a batch level. Items are decisions based on pre-established Business Rules, and outputs are created as identified. The application provides for flexible reporting of data, settlement, all items files and archive fees as necessary.

"The emergence of multiple image exchange networks offers a variety of image and IRD options to financial institutions," said Fred Redeker, NCHA President and CEO. "In light of this reality, and the industry needs, NCHA is about bringing multiple options to its membership and working to support the interoperability of each with its incomparable national settlement platform. Through relationships with these important vendors such as EDS, NCHA is working toward its mission to continually enhance the efficiency of the Payments System for all financial institutions."