EDS, Western Payment Alliance Roll Out Digital Image Check Service

EDS Western Payments Alliance

The passage of federal legislation proposed by the Federal Reserve and now being considered by Congress is key to the success of the service, however. The Check Truncation Act essentially would lift an authorization requirement by a check owner and is expected to broaden the use of digital image checks.

The new service is aimed at helping financial institutions convert paper checks into digital images for processing by passing a digital image to the receiving financial institution. EDS believes the service will result in big cost savings, incurred by the expense and time delays found in the physical movement of checks by ground and air transportation.

San Francisco-based WesPay is one of the nation's largest cooperative non-profit regional payment associations. It includes about 1,100 members in the Western United States and Pacific region and handled about 1.8 billion checks last year in the Western states. WesPay has taken a lead role in promoting the use of digital image check technology by introducing the new service to its member financial institutions in the Western United States.

WesPay member institutions Union Bank of California, Zions Bank and First Hawaiian Bank have already begun to implement the new service, according to EDS.

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The system, designed and developed by Zions Bank and licensed exclusively to EDS, could become the national standard for the financial industry, James Pitts, director of EDS Payment Services, said in a statement. With almost 50 billion checks written annually, according to WesPay, the market is wide open.

Pitts also said EDS plans to aggressively roll out this system to other regional associations over the next 12 months. The rollout is designed to test the processing infrastructure of the service and the first phase, which began in February, has functioned with actual images of returned checks. Participating institutions will consider transit check collections during the next phase, according to EDS.