Chase Manhattan Corp. is gearing up an electronic check-retrieval service using imaging technology for wholesale customers.

The service is to be available before yearend.

With the service, Chase will allow customers to retrieve electronic copies of checks presented against controlled disbursement accounts, said Teresa Turner Cahill, a Chase vice president, in a presentation at the New York Cash Exchange conference last week.

Ms. Cahill said the new image processing service will help Chase distinguish its controlled disbursement services from those of other banks, as well as enable Chase to collect more fees.

The bank wants to change controlled disbursements "from a commodity-based product to more of a value-added" product, she said.

Controlled disbursements are a popular corporate cash management account in which just enough money is moved into the account on a daily basis to fund the checks presented against it.

New York's Empire Blue Cross and Blue Shield will be the first Chase customer to use the new electronic check-retrieval service.

The service will work like this: Chase will scan checks presented against Empire's controlled disbursement accounts through NCR Corp. check-imaging equipment at a Chase check processing center in Syracuse, N.Y. NCR, of Dayton, Ohio, is a unit of American Telephone and Telegraph Co.

Electronic images of the front and back of the checks will be stored in a high-capacity optical-disk jukebox capable of storing up to 20 million check images, Ms. Cahill said.

Playing the Data

Like old-time record jukeboxes, optical jukeboxes have mechanical arms that grab disks from racks and load them into devices that "play" them. Data the disks hold are transmitted over an electronic network to computers.

Empire officials will be able to use customized personal computers in their offices, called ImageStations, to retrieve the images of checks from the optical jukebox.

Empire will retrieve checks when needed to answer complaints or inquires. Now copies of checks presented against controlled disbursement accounts must be retrieved from microfilm or microfiche files, a process that can take days.

Empire hopes the new electronic check-retrieval system will enable it to respond to inquiries in a day that now take an average of eight days to handle, Ms. Cahill said.

Another Chase customer will use a similar electronic check-retrieval service, but with a different twist.

Instead of retrieving check images with an ImageStation, images of all checks presented against the other Chase customer's account will be stored on digital audio tape or optical disks and express mailed each day to the company, Ms. Cahill said.

The Chase customer will the load the check images into its own optical jukebox, and make the images available to customer service attendants working on personal computers hooked up to the jukebox through an electronic network.

Ms. Cahill declined to name the Chase customer, but said it was in the business of letting consumers pay bills with personal computers.

Fighting Crime

Ms. Cahill added that Chase is also interested in using its check imaging equipment to deter check fraud. To do this, the bank wants to use encryption technology to put special codes on checks that could be read by the check imaging equipment, and used to detect forgeries.

Ms. Cahill said that Chase wants standards bodies to make this technology a standard part of check designs. But she said that Chase faces substantial opposition from banks that fear that the new technology would cost too much to implement.

Ms. Cahill said that Chase will adopt the technology only if the bank can overcome the opposition from other institutions, and get standards bodies to accept the technology.

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