Check 21 Milestone: National Networks Connect

NEW YORK – In an event that could prove more important than America’s transcontinental railroad hook-up, the two dominant national electronic check networks, Endpoint Exchange and SVPCO announced yesterday they have agreed to exchange electronic checks and images. The deal, which extends to 4,000 banks and credit unions and more than 10,000 endpoints, will provide financial institution participants with a new opportunity to streamline their check processing and accelerate adoption of electronic image exchange, given the status of legal tender under the 2003 law known as Check 21. Endpoint Exchange is a wholly owned subsidiary of Metavante, which is in the process of being spun off by Marshall & Ilsley banking company. SVPCO is a subsidiary of The Clearing House Payments Co., which is owned by JP Morgan Chase, Citibank, Bank of America, Wachovia and about 20 other big banks. The two exchanges are not only competing for the new electronic check imaging, but for the vast volume of payments processing that the Federal Reserve is in the process of privatizing. The other major electronic clearing networks are Viewpoint Exchange, a network owned by seperately by JP Morgan and BofA, SunTrust Banks, U.S. Bancorp and IBM Corp., and the Fiserv Clearing Network.