Viewpointe Archive Services LLC's image-sharing system, conceived as a centralized check-clearing hub, is morphing into a decentralized exchange network that nonmember banks could use to send files to one another.
The Charlotte technology vendor has long claimed to be unique because of its file-sharing model for clearing images.
However, by developing a service that will let banks exchange files with each other, whether or not they use the archive, Viewpointe is becoming a more direct competitor to the image-exchange networks operated by Clearing House Payments Co. LLC's SVPCO, Marshall & Ilsley Corp.'s Endpoint Exchange Network, and the Federal Reserve banks.
"To a large degree, Viewpointe is competing with SVPCO in the exchange arena," said Bobby Moody, the senior manager of payment services for Synovus Financial Corp. of Columbus, Ga. Last month Synovus became the second banking company in as many months to announce that it would use Viewpointe's Pointe2Pointe service.
Eleven major banking companies store check images in Viewpointe's massive shared archive, and the vendor says its system stores about 65% to 70% of the nation's check volume.
It has spent years developing its system and has long said its goal is to let its customers clear checks within the archive, with banks giving each other permission to view their files. Four member banks are already doing so, though the volume is low, and the vendor has said the approach is more efficient than image-exchange networks, in which banks transmit the files to each other.
But in May, Viewpointe said it would let nonmembers connect their own archives to its own to facilitate the exchange of images. Compass Bancshares Inc. of Birmingham, Ala., was the first company to sign up for Pointe2Pointe. BancorpSouth Inc. of Tupelo, Miss., said last week that it is preparing to use the service. Those two companies, along with Synovus, are conducting 90-day implementation projects.
None of the three store images in Viewpointe's shared archive, but all of them said they wanted to exchange images with some of Viewpointe's members. Synovus and BancorpSouth said they wanted to exchange files with Compass, as well.
"With Pointe2Pointe, they've basically adopted the SVPCO model as one of their options," said Aaron McPherson, the research manager of payments at Financial Insights Inc., a Framingham, Mass., research unit of International Data Group. "It's not that big of a jump. Basically, they added the ability to download images rather than using Viewpointe software to view them."
Jennifer Lucas, the marketing director at Viewpointe, conceded that the new model lets banks use her company as a middleman for transmitting files between companies that don't use the archive.
She said that, "short term, we are trying to promote adoption" of image settlement. However, she also said that Viewpointe's long-term focus is on sharing rather than exchange, and "we don't think we compete with any of" the image exchange networks.
Banks have multiple options for using images to clear checks. Many banks are eager to cut their processing costs and accelerate settlement by transmitting checks electronically, instead of sending the original items. However, use of image systems remains low, and though Pointe2Pointe is a new option for banks, it remains to be seen how rapidly it will take off.
Mr. Moody said Synovus is talking with potential Viewpointe trading partners, which he would not name. Pointe2Pointe customers must establish individual agreements with each of the banks with which they hope to exchange images.
Synovus is already sending images across Endpoint Exchange, he said. His company is also testing its connection with the Federal Reserve and hopes to use the FedForward service to transmit check images to the Fed by the first week of next month.
"With the way the landscape is today, we believe it makes sense to have multiple clearing partners, which is really exactly the same way we do it in the paper world," Mr. Moody said.
George F. Thomas, an executive vice president at The Clearing House, expressed skepticism about whether Viewpointe's exchange will take off. Viewpointe conducted its first image-sharing test in December, and the low participation now demonstrates the challenges in rolling out image-clearing services, he said.
Mr. Thomas said he does not consider Viewpointe a direct competitor, and noted that "they don't have a working product."
However, First Horizon National Corp. and SunTrust Banks Inc., began clearing through the Viewpointe archive in December, and Bank of America Corp. started doing so this month.
Lenora Thompson, the group vice president for banking services at SunTrust, said Wednesday that clearing volume remains low but has grown to thousands of images nightly, from a few hundred when her company started sharing files with First Horizon.
She agreed with Mr. Moody that Pointe2Pointe could facilitate image clearing with more banking companies. "We're excited about that. That gives us more potential trading partners to exchange with," she said.
For now SunTrust is focusing on ramping up its volume with First Horizon, she said, though "we're going to be looking at new partners very soon."
Eight banks are using SVPCO's network to exchange images, but the going has been slow. The system had its first successful test in August, and participants are sending 4 million items per month, only a small fraction of their volume, through the network. Its system is also connected to the Fed's and Viewpointe's.
The Fed has also had problems getting its image systems up and running. FedForward, which lets banks transmit images to the Fed, went live in October, but several target dates have been missed for the introduction of the FedReceipt service for sending files to paying banks.
"We're still in testing" with FedReceipt, said David Fettig, a spokesman for the Federal Reserve Bank of Minneapolis, who would not offer a revised start date. "My hunch is, it all depends on how testing goes."
Jeff Vetterick, the general manager of Endpoint Exchange, said about 4,000 banks, most of them small ones, are enrolled in the network; 2,500 of them are clearing payments through it, and the rest are testing their connections. The banks transmitted just 6 million images through the network last month, he said.
Viewpointe's move into image exchange is a major departure from its file-sharing approach, Mr. Vetterick said. "It's potentially more competition for me, but it's a good thing, because it validates our model."
