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Key Messages :

Check Image Collaborative Communications Work Group. Key Messages : Paper checks are being transitioned to electronic images of checks at a pace that is unprecedented. Check images are currently collected in two forms, as substitute checks and as check images.

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Key Messages :

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  1. Check Image Collaborative Communications Work Group • Key Messages: • Paper checks are being transitioned to electronic images of checks at a pace that is unprecedented. Check images are currently collected in two forms, as substitute checks and as check images. • Substitute checks assist in evolving traditional paper check clearing to image-based clearing. As a precursor to full check image exchange, the number of substitute checks is a positive indication of the acceptance of image exchange. • More than 12.3 billion annual check payments totaling $15.1 trillion per year have already moved from the traditional paper-based clearing process to improved image-based processes. • On an average day during November 2007, more than 8,200 institutions received almost 36 million check images for posting. These total 9.0 billion checks per year. • This CheckImage Collaborative image clearing report reflects transactions settled through the Federal Reserve, PaymentsNation (formerly NCHA), SVPCO and local / regional exchanges. When the same payments were cleared through two or more of these organizations, those payments were counted only once. • The 2007 Federal Reserve’s Payments Study shows that the volume of checks (both written and paid) continue to be larger than debit card, credit card or ACH transactions. The report also shows that the dollar amount of checks increased from 2003 to 2006 from $40 to $41.7 trillion.

  2. Highlights: Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Volume doubled in 8 months – March ‘07 (17.8) to November ’07 (35.7). Average daily image volume grew from 11.7 to 35.7 million or by 205% from November 2006 to November 2007. November 2007 volume annualized is 9.0 billion images received per year. 35.0 Average # of Images Received /Day 30.0 35.7 Million Images / Day 25.0 20.0 # Items in Millions 15.0 10.0 17.82 Million Images / Day 5.0 Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges 0.0 Jul-07 Apr-07 Oct-07 Mar-07 Jan-07 Feb-07 May-07 Jun-07 Dec-06 Aug-07 Sep-07 Nov-07 Nov-06

  3. Highlights: Chart reflects the number of paying bank R/Ts receiving check images. Many R/Ts through November 2007 were for individual institutions. The number of R/Ts that received images almost doubled between November ’06 & November ‘07 from 6,088 to 11,982. 11,982 routing transit numbers represents more than 8,200 institutions or approximately 50% of all U. S. institutions are receiving check images. 12,000 Number of R/Ts Receiving Images 10,000 Image Receiving R/Ts 11,982 8,000 # Items in Millions 6,000 4,000 2,000 Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges 0 Jul-07 Apr-07 Oct-07 Mar-07 Jan-07 May-07 Feb-07 Jun-07 Dec-06 Aug-07 Sep-07 Nov-06 Nov-07

  4. Highlights: All checks were imaged before reconversion to substitute checks. Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Over 13 month period Image-based clearing volume grew from 428 to 1,029 million / mo or by 140% with 73% of the volume cleared by image in November 2007 (Only 21 days in Nov). The annualized November ‘07 volume (12.3 billion items/yr.) is approximately 41% of total check volume cleared. # of Images & Substitute Checks Forward Collection Only 1,000 800 600 Images # Items in Millions 400 200 Substitute Checks Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges 0 Jul-07 Apr-07 Mar-07 Oct-07 Jan-07 May-07 Feb-07 Jun-07 Dec-06 Sep-07 Aug-07 Nov-06 Nov-07

  5. Highlights: All checks were imaged before reconversion to substitute checks. Chart reflects checks received by DFIs for payment from other DFIs or an intermediary. The dollar amount grew from $608 to $1,268 billion / mo or by 108%. Annualized November ‘07 dollar amount = $15.1 trillion/yr. $15.1 trillion is 36% of the total dollars cleared via check and is almost five times the sum of all debit card and credit card payments. $ Amounts of Images & Substitute Checks Forward Collection Only $1,200 $1,000 $800 $ Amounts in Billions $600 $400 $200 Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges $0 Jul-07 Apr-07 Oct-07 Mar-07 Jan-07 May-07 Feb-07 Jun-07 Dec-06 Sep-07 Aug-07 Nov-06 Nov-07

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