NEW YORK -
The addition of the $14-billion corporate represents the onset of the second-step marketing of the national exchange, following the earlier connections to the nation's largest banks, most of whom are part-owners of the network, according to Susan Goold, director of products and services at SVPCO. "We're looking at the next level of aggregators," said Goold, adding that other corporates are in their sites. "We're talking to a number of corporates. Hopefully, this won't be the last."
Several corporates have already connected to the national check and image grid via Endpoint Exchange, the other private-sector network owned by Metavante, or the Federal Reserve, which is working to privatize the payments system.
SVPCO is a conglomeration of as many as eight regional check clearinghouses that is now owned by 20 of the biggest banks, including: JP Morgan Chase, Citibank, Bank of America, Wachovia, Wells Fargo, KeyBank, Fifth Third Bank and U.S. Bank.
Fiserv operates a fourth image and check exchange network.
All of the major networks have different levels of connectivity to each other and to the hundreds of thousands of credit unions, banks and businesses across the country. SVPCO, for example, has a gateway to Endpoint Exchange and to the Fed. While Endpoint Exchange is connected to Fiserv and the Fed.
The roll-up of what was more than three dozen regional check exchanges and payments clearinghouses represents the first step of a consolidation and privatization of the payments system brought on by Check 21, the 2003 law that gave electronic checks and images legal status. The next step is expected to be a further consolidation of the survivors.
SVPCO's Goold said the targeting of corporate credit unions represents the next logical step in the process, the gathering of second-tier payments aggregators.
Members United, itself the conglomeration of three recently merged corporate credit unions: Mid-States Corporate FCU, Empire State Corporate FCU and Central CU Fund, recently acquired the Illinois CU League's check processing operations, giving it greater need for the electronic exchange services to serve its 2,100 credit union members.
"The SVPCO Image Payments Network provides Members United with a very cost effective image exchange solution that meets the volume needs of our organization," said Terry Faurote, vice president, Item Processing for the corporate, based in the Chicago suburb of Warrenville, Ill. Also being discussed are international gateways to connect the U.S. payments systems with overseas institutions. What has slowed that process is that the largest international banks, like Citibank, JP Morgan and Bank of America, tend to exchange images internally.
