Fiserv Inc.'s decision to store its clients' check images in Viewpointe LLC's archive is a strong vote of support for clearing through image-sharing, market watchers say.
But image exchange — the transfer of images to the paying bank from the bank of first deposit for clearing and settlement — still reaches a wider market, and both approaches are likely to grow for the next several years as banks accelerate their shift to clearing with images, observers say.
Fiserv, the nation's largest private outsourcer of item processing, will clear checks on behalf of its 1,600 customers with other archive users through the image sharing process, Viewpointe announced Tuesday.
Stephen J. Ward, a division president in Fiserv's item processing group, said the decision was a natural evolution of his Brookfield, Wis., company's relationship with Viewpointe.
Fiserv agreed to connect to Viewpointe in November 2005 and reached an agreement with Bank of America Corp. in April to exchange images through Viewpointe's Pointe2Pointe service for transmitting images with trading partners that did not use the archive.
"The process of archiving images is a commodity," Mr. Ward said. "The thing that is of value from the standpoint of our clients is the delivery of applications."
Those applications — including fraud monitoring and the production of image statements and CD-ROMs of check images — will continue to be delivered through Fiserv's ImageSoft, he said. "That part isn't going to change."
Diane Scott, the chief sales, marketing, and product officer at Viewpointe, said her New York company believes "there is a great opportunity for the market to re-evaluate the archive business."
Viewpointe estimates that 70% of checks written in the United States go into its archive, and the 11 banks using the archive include large cash management providers such as B of A, JPMorgan Chase & Co., and Wells Fargo & Co., she said.
This deal will let the 1,600 banks and credit unions that use Fiserv for item processing share images within the archive, Ms. Scott said. "You no longer have to ship these images all over. You just have to ship the data."
The Clearing House Payments Co. LLC, a top provider of image exchange services, estimates that the number of transactions sent on its network surged fourfold last year, to 2.8 billion items.
Susan Long, a senior vice president at the New York clearing organization, said it added seven institutions last year to its SVPCO Image Payments Network and has eight more in the process of connecting. She predicted that the two clearing systems would co-exist for the foreseeable future.
"Exchange is the lowest common denominator," Ms. Long said. "Not everybody can do image-share, because everybody has to be in the same archive."
Bob Meara, a senior analyst at the Boston research and consulting firm Celent LLC, said Pointe2Pointe has garnered only a handful of users.
As banks design their image systems, "it's all about cost and feasibility," Mr. Meara said. "Down-market, they don't have a lot of alternatives."
More than 800 small institutions participate in the Fiserv Clearing Network, an "on-we" network designed to cut bankers' clearing costs by reducing the number of intermediaries in the process, he said. "They're not a huge player, but every little bit helps."
Nancy Atkinson, a senior analyst at the Boston research and advisory firm Aite Group LLC, said competitive issues would prompt many banking companies to maintain in-house archives. "Banks usually don't want to let their data go into repositories that are controlled by others."
