US Payments Companies Unite to Meet Check 21 Challenge
The Clearing House and the Western Payments Alliance have signed a letter of intent to pursue combining their checking services functions. The move is the first step in the overall strategy of creating a national check clearing and settlement organization. ‘The proposal is an important step, especially in the face of Check 21,’ said Dennis Toda, Vice President, Operational Integrity of WesCorp FCU and Chairman of WesPay. ‘It provides the scale and efficiency of a strong national system with a regional touch.’ The Clearing House, through the National Check Exchange, processes 4 million transactions per day totalling $7.8 billion for its 35 participants in the Northeast. WesPay’s checking services function clears more than 7 million transactions totalling $7 billion in daily value among its 21 participants. ‘The proposal is consistent with the industry’s need to rationalize and standardize industry infrastructure,’ said Nicholas Alex, Senior Vice President/Director of Global Products & Strategy for Bank of America. Paper check volume is declining at a 3-5 per cent annually as payments are becoming increasingly electronic. The passage of Check 21, which allows for images to be exchanged instead of paper, will accelerate the decline in the number of paper checks processed.