May 2007 Was Record Month for Check Imaging Volumes and Dollar Value

Implications: Key Implications: SVPCO, the electronic check and check image/exchange network processed record check-images in May, totaling over 217 million check-images exchanged, compared to May 2006 and the dollar value of those exchanged images surpassed $397 billion. The Check 21 Act (Check Clearing for the 21st Century Act) paved the way for the use of substitute checks and removed the dependency on transportation systems to move physical paper for check clearing.  Since the passage of the Check 21 Act, FIs and credit unions have worked to build the infrastructures, exchange networks and adoption and integration into its front and back-office processing. In 2006, Check 21 volume (substitute checks and image exchange) grew 726% and image-exchange grew substantially to 3,160%. The value of images exchanged reached 21% of total check processing value in Dec 2006 and exceeded the combined value of debit and credit card payments and may be a good indicator of potential growth for 2007.

Analysis: Comments/Perspective:
2007 may be the year of "check-imaging/exchange" and serve as a "tipping point" for exponential growth in check-imaging/exchange volume, dollar value, market adoption and integration. The potential for ATM check imaging hasn't been fully realized, however, the economics may become more stronger as the image-exchange infrastructures continue to develop, saving  transportation costs for remote deposit ATMs. FIs (Financial Institutions)  and  credit unions are investing in check-image/no envelope deposit ATMs and technologies, to exploit the potential future growth and offer their customers "real time" deposits, easier access to funds and the safety and security of imaged bank notes, vertically eliminating fraud at ATMs equipped with check-imaging technology.

1.  When you talk with FIs about check-imaging they no longer question whether check-imaging/exchange will take off but rather, when will it happen.  It appears that 2006 may have paved the way for a "tipping point" in 2007 for check-imaging /exchange and for the  first time in 2006, image exchange volume exceeded substitute check volume and we may begin to see in 2007, the cost reduction benefits of check-imaging/exchange and may realize exponential growth in check-image volume, dollar value and ROI

2.  Operators of image-exchange networks are also realizing the possible constraints of not allowing other networks access to their respective networks and in a move that may dramatically change the landscape, they have agreed to offer reciprocal access between the Viewpointe, Endpoint Exchange and SVPCO networks and this may mean FIs could  have greater access to other image-exchange networks and may be able to grow check-image/exchange volume and dollar value