Two bank technology providers that serve thousands of community banks and credit unions have struck a deal to link their image exchange networks.
Fiserv Inc. plans to announce today that it will link its fledgling Fiserv Clearing Network to Metavante Corp.'s Endpoint Exchange Network. Banks, thrifts, and credit unions using either network could then send check images to any using the other.
The agreement, which is not exclusive, could accelerate the adoption of image exchange systems among the smaller financial institutions that are both companies' main customers and have long been in the forefront of the shift to imaging.
The two networks are among a handful that enable participating financial institutions to settle checks as digital images.
Observers say check image exchange will not become popular until the networks forge more alliances such as this one.
"This is the first step in a maturing Check 21 environment," said Mark Craig, Endpoint's general manager.
Endpoint, whose operator is the technology subsidiary of the Milwaukee banking company Marshall & Ilsley Corp., was the first network to go live with image exchange, in 2002. It now has 3,400 banks actively trading image files and 600 getting ready to do so.
Fiserv, of Brookfield, Wis., announced the Fiserv Clearing Network last May, primarily to serve the 1,700 institutions for which it provides outsourced check processing. Stephen J. Ward, the executive vice president of Fiserv's item processing group, would not say how many institutions have subscribed to its image network, but he did say the number is growing. The company also operates one of the largest shared archives of check images.
"We have Fiserv customers literally next door to Endpoint Exchange customers," but they now have "no way to connect," Mr. Craig said. "We are beginning to see more cooperation and a more focused effort to get to the end of this electronic tunnel."
Mr. Ward said a pilot test of moving check images between the Fiserv and Endpoint exchanges is set to begin in the third quarter.
They have already collaborated on image exchange. In October, shortly after the Check Clearing for the 21st Century Act took effect, an Endpoint member bank in Kansas sent a batch of check images to a Fiserv facility in Georgia, where they were printed out as image replacement documents and delivered to the Fed for presentment. Fiserv is now regularly printing out IRDs for Endpoint.
Financial institutions are also moving or sharing check images through two other major providers and the Federal Reserve.
Seven large banks are now sending files across the SVPCO Check Image Exchange Network, which is operated by Clearing House Payments Co. LLC of New York. And in December, Viewpointe Archive Services LLC of Charlotte said two banks had started settling transactions through its shared archive.
Some large banks may join more than one clearing network, though smaller banks typically use only one, and many use none.
Some of these systems already have agreed to connect with each other; SVPCO has reached deals with Fiserv, Viewpointe, and the Fed. Fiserv also has an agreement with Viewpointe, and expects certification by midyear to connect with the Fed's image network.
Mr. Ward said that to create a clearing network that will allow any U.S. bank to reach any other, all of these competing systems need to be linked. "We have to have this collaboration among the various participants to make this all work," he said.
No exchanges are yet taking place between Fiserv and the others, Mr. Ward said. "There needs to be an end customer on both sides that wants to do this," he said.
Mr. Craig said that he could not discuss Endpoint's relationships with SVPCO and Viewpointe, but that members of both networks have asked to join the Endpoint Exchange. "We are working hard on getting it done," he said.
One key component of the various agreements is a common standard for image files. Endpoint was the odd man out until recently, but in March it said it was adopting the industry-standard Eccho rules for exchanging check images.
Alenka Grealish, the manager of the banking group at Celent Communications LLC, a Boston research and consulting firm, called the Fiserv-Endpoint agreement "another landmark in the march toward connectivity."
She noted that Viewpointe and SVPCO are still focusing on connecting the big banks that own them to one another.
"Except for Endpoint, which has gone live with all its participants," the other networks are "still getting their own house in order," Ms. Grealish said.
