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This time Congress got it right
Following the suspension of all aircraft flights after the 9/11 attacks, the nation’s paper-based checking system that required the physical transport of checks from one bank to another for processing ground to a halt. It is estimated that over $40 billion was delayed from clearing for several days. Congress recognized this inherent flaw in the system and passed the Check Clearing for the 21st Century Act ( Check 21) that went into effect on October 28, 2004. Check 21 is designed to foster innovation in the payments system and to enhance its efficiency by reducing some of the legal impediments to check truncation. The Check 21 law permits the processing of check information electronically, and the delivery of a substitute image of the check for bank deposit. The substitute image is the legal equivalent of the original check and includes all the information contained on that original paper check.
How Check 21 makes check processing more efficient
Instead of physically moving paper checks from one bank to another, Check 21 allows the processing of checks electronically. A picture of the front and back of the check along with the associated payment information is captured and transmitted electronically for payment. This process reduces the cost of physically handling and transporting the original paper checks, which can be very expensive and time consuming.
A need in search of a solution
 Once the benefits of electronically processing checks were recognized, the financial industry began to search for solutions to the technological challenges of making image deposit checking a reality. In addition to check scanning equipment and desktop software, the service and support aspects of the process needed to be addressed. Banks and other financial institutions working within their firmly entrenched paper check processing models, have found they are not in a position to
supply a timely complete solution for their customers.
That solution is Image Deposit Exchange
The Exchange is uniquely positioned to provide a total image deposit solution for merchants and corporations looking for the convenience and cost savings of electronic check processing. Our proven system includes high speed scanning equipment, desktop software, and complete check processing services. From image capture to check clearing to funds deposited directly into your existing bank account - up to 40% faster than traditional paper processing. And because there’s no need to switch banks or open new
accounts, The Exchange system is ideal for banks looking to provide electronic checking to their customers.
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