The Federal Reserve banks are introducing new ways for smaller banks to use the electronic data interchange format to help their business customers move to electronic payments.

Jim McKee, a senior vice president in the Fed's retail payments office, said the report-generation services that the central bank announced last week can help banks, and their customers, keep better track of electronic payments, especially automated clearing house transactions.

"There's more of a push for business payments to move from paper to electronic," he said.

The Fed introduced FedEDI Plus in April 2008, enabling banks to search their FedACH transactions for EDI messages, which are usually within the addenda records accompanying corporate payments made with Nacha's CTX format.

The service translates the EDI payment and remittance information into reports that people can easily read. The banks can use this information themselves, McKee said, or can pass it along to their business customers to match ACH payments to documentation.

The EDI service targets the 7,000 institutions that use the Fed's connection services FedLine Advantage and FedLine Web and, McKee said, 1,000 financial institutions using various features of FedEDI.

The reports announced last week are: a Customer Transaction Activity Report, which identifies business customers set up to receive FedEDI reports; a Death Notification Report, to help institutions meet legal requirements associated with federal government benefit payments; and an ACH Routing Number Activity Report, which summarizes transactions for specified routing and transit numbers.

An IAT Report will be available in September, the Fed said, to help institutions comply with rules for international ACH transactions that take effect then.

"EDI is getting much easier to use, even at the smallest businesses," McKee said.

Nancy Atkinson, a senior analyst at the research and advisory firm Aite Group LLC in Boston, said the reports could help smaller banks that may lack EDI capabilities.

"ACH is able to capture quite a bit of remittance information through addenda records," she noted. "But many financial institutions don't have the ability to pass that along to their customers."

By providing a way to translate more reports, the Fed is giving smaller banks new ways to serve business customers, she said.