JPMorgan Chase Introduces Image Cash Letter Service

By Bills, Steve | American Banker, March 23, 2006 | Go to article overview

JPMorgan Chase Introduces Image Cash Letter Service


Bills, Steve, American Banker


JPMorgan Chase & Co. is hoping its new cash letter service will encourage large corporate customers to use imaging technology.

The service, which the New York banking company unveiled Wednesday, can handle a large number of checks for deposit. It lets correspondent banks and large corporations convert checks into electronic files and transmit them to the bank for deposit.

Craig T. Vaream, a vice president at JPMorgan Chase and the senior product manager of domestic check deposits in the treasury services group, said the service complements its remote deposit service, Image Deposit Direct, which is aimed at smaller companies that send only a few checks, up to a few hundred, to the bank.

"This image cash letter rounds out our suite nicely," he said.

Using remote deposit systems for small volumes is a relatively simple matter, Mr. Vaream said, and requires just an Internet connection, and specialized software and a desktop scanner that the bank provides. "It's not that hard to implement. It's easier than changing your item processing."

But using image deposits is more complex for large customers, which have higher volumes and often have numerous business units and accounts in many states or countries.

The banking company began testing the cash letter service in the third quarter through its JPMorgan Treasury Services. Mr. Vaream said it now has 25 customers sending it image cash letters. Several large corporations send it large volumes of images from their in-house lockbox operations, while others consolidate images that are created at multiple locations into a single cash letter. Correspondent banks are either scanning checks in-house or outsourcing the work to third parties.

He would not say how many of the current customers are corporations or banking companies, nor would he discuss dollar volume. He did say JPMorgan Chase is processing hundreds of thousands of images each week from those customers.

Most are introducing imaging through "a rollout, rather than a big-bang approach," Mr. Vaream said. "The complexity of it makes it more challenging for clients."

For starters, some technological sophistication is needed to assemble the elements of the file, which must follow the X9.37 image cash letter standard. He also said that JPMorgan Chase has worked closely with its customers to ensure that the images they produce can be read by the banking company's systems. It has also been testing connections to be sure its electronic pipelines can handle the expected volume. …

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