Image Exchange Agreement Planned

Endpoint Exchange Network and the Federal Reserve's Retail Payments Office are planning to establish system connectivity to allow for the sharing and electronic exchange of check data and images between their respective platforms.

The changing ratio of paper to electronic payments presents a business challenge to all financial institutions, which are under increasing pressure to generate efficiencies from their item processing operations, particularly with the provision of the Check 21 Act going into effect in late October of 2004. With the implementation of Check 21, the Federal Reserve will introduce a new suite of services to offer customers more options than ever before.

The Federal Reserve provides check processing services, including traditional check clearing, electronic check presentment, image capture, and image archive services. The Fed also offers capture, archive, retrieval, and delivery options that support interactive services not only between the Reserve Bank and the depository institution but also between the financial institution and its retail customers.

The combined reach of the Federal Reserve Banks and the Endpoint Exchange Network - the imaging technology infrastructure and established customer relationships - could facilitate check image exchange. This collaborative relationship could have a positive effect on the overall productivity and efficiency of the national check clearing and settlement system under Check 21.

Customers with image-enabled operations will be able to send image cash letters and return image cash letters directly to a Federal Reserve Bank, resulting in a more efficient process for return item pulls, return item qualification and cash letter creation. For deposit side customers not yet imageenabled, Reserve Banks can select items for expedited clearing, reduced operating costs and extended processing windows. This will facilitate accelerated clearing of large-dollar items and improve deposit times.