The New York Clearing House has announced plans for a three-month test beginning next month to gauge the feasibility of sending and receiving digitized images of checks stored on systems from different manufacturers.
The clearing house will test the compatibility and quality of image systems from BancTec Systems Inc., International Business Machines Corp., NCR Corp., and Unisys Corp. The clearing house will test the various image systems using networks of personal computers.
Three of the vendors have such systems commercially available: IBM said it will have the hardware and software available in time for the test.
The exercise is part of the clearing house's test of electronic check presentment, in which a receiving bank transfers check data immediately to a payor bank, in advance of the paper check.
This enables the payor bank to determine if sufficient funds are available in the checking account several days before it receives the paper check.
Dealing with Varied Systems
"Our banks use different vendors, and we need to provewe can exchange images among different vendors," said Hank Farrar, a senior vice president at the New York Clearing House.
In the first phase of the test, the clearing house will do an onsite test, exchaning images from one image system to its switch, which will route the image to another imaging system. In future phases of the test, member banks will also exchange images with the clearing house.
Initially, member banks will only exchange images of checks over a certain dollar amount. Eventually, the clearing house hopes to exchange images of all checks.
The clearing house plans to f use test documents - real checks that have already been processed. It will not initially test large volumes of checks, because it does not want to use expensive telecommunications facilities required to send large volumes of images.
Determining Image Quality
Clearing house officials will evaluate the quality of the image capture by the different systems. Check imagk systems must be able to capture images at a quality called "gray scale," in which signatures and other authorizations written on the backs of checks can be read clearly.
There are no clear standards for this quality of image.
The Federal Reserve Bank of Boston has tested the quality and compatibility of several different check image processing systems. These tests have focused on a lower grade quality, called black and white quality.
Mr. Farrar said this quality of image may not be sufficient to meet legal requirements for high quality check reproductions, in the event a check authorization is questioned.