SAN DIEGO — Viewpointe LLC has developed a pair of settlement services that it hopes will help it gain share from rival image networks.
The New York company announced this week an automated settlement entry, or ASE, service designed for high-value check exchanges and an image integrity service that can catch mismatches between check images and their associated data files.
"This is the next generation of what we need to deal with image exchange," Diane Scott, the president of Viewpointe's emerging-business unit, said in an interview this week at the Bank Administration Institute's TransPay conference here.
Ms. Scott said that the ASE service will be available to banks that use Viewpointe's clearing and settlement services. These include the banks that use the image archive operated by Viewpointe and banks that settle through what was PaymentsNation, a Dallas clearing house that Viewpointe acquired in December.
The image integrity tool can be used by Viewpointe's archive customers and by users of Viewpointe's Pointe2Pointe service for banks that want to send and receive images through Viewpointe's network but do not store their images in its archive.
"We believe these two products position us well for some competitive advantage," Ms. Scott said.
Aaron McPherson, the research manager of payments for the Financial Insights unit of International Data Group Inc. in Boston, said these services are "the third generation" of image exchange capabilities, after the initial rollout of image transmission and the automated receipt and inbound processing of image files.
"This represents a maturing of the check image exchange market," he said.
The ASE service lets banks establish business rules about the timing of check presentments. Ms. Scott said that cash management banks frequently have bilateral agreements with trading partners for such matters, especially for high-value business-to-business payments made through the controlled disbursement accounts that large corporations use for liquidity management.
Participating banks can program their specific business rules into the ASE "decisioning engine" to assure that the payments for check image exchange conform to the deadlines they have negotiated with their trading partners.
The service is designed to automate the business rules guiding settlement of those payments and to help avoid costly payment reversals resulting from missed deadlines, Ms. Scott said. "It takes the manual element out of the settlement process," she said.
If presentment occurs after an established deadline, settlement is deferred, typically to the next day's exchange window rather than to a later deadline on the same day.
Mr. McPherson said the benefit is to free up cash for corporate customers.
Companies historically have used controlled disbursement to slow the clearing of their checks and to maximize their cash balances with the bank, but the growing use of image exchange, with multiple settlement deadlines throughout the day, is eliminating the value of sending payments cross country to increase the clearing float.
The bilateral agreements on presentment deadlines can free up funds that the corporate clients then can use for other purposes for the rest of the day, an especially appealing proposition considering today's tight credit conditions, Mr. McPherson said.
"You can really make some money by not having to hold so much cash in reserve," he said. "I think this will appeal immediately to the archive member banks."
With its image integrity service, Viewpointe is commercializing a service that it began testing last summer. The company announced its plans last February at the TransPay conference, saying that SunTrust Banks Inc. in Atlanta would be the service's test customer.
The service not only does image quality checks — to determine whether an image is too light, too dark, unfocused, or otherwise defective — but also uses an automated system that compares data from the image itself — the amount of the check, its account number, and other details — against the "metadata" file associated with the image, which is used by other systems to call up specific checks, for example, for review by a customer using online banking.
Viewpointe put out a white paper at the conference that said it had achieved 100% success using live data on 14 million SunTrust items. Ms. Scott said the service recognized data errors such as misreads between the numbers 1 and 7 or 3 and 8 and 80 other scenarios.
Avoiding such errors is important, Ms. Scott said. "A mismatch could be a privacy breach, and that is not something any bank wants to entertain."
Viewpointe plans to sell the service to institutions that use its clearing and settlement service. It has said that images undergoing its scans would be certified with what it called the "Viewpointe Integrity Stamp," which would be placed in the header of the file to avert redundant processing.
The service supplies results that both trading partners can rely on for image integrity, Ms. Scott said. "A bank can run it on its own, but it can only run it on its own side."
