Magazine article American Banker

Check Truncation Programs Gain Steam: J.D. Carreker Aims to Help Unisys Users Join Eccho Clearing House

Magazine article American Banker

Check Truncation Programs Gain Steam: J.D. Carreker Aims to Help Unisys Users Join Eccho Clearing House

Article excerpt

Two programs aimed at shortening the the paper trail in check processing areas made some progress this week.

J.D. Carreker & Associates announced Wednesday an agreement with technology company Newtrend to develop software that will enable users of Unisys Corp. check processing equipment to join the Electronic Check Clearing House Organization, or Eccho.

The bank association is devoted to exchanging payment information electronically before the actual check is transferred.

In a separate development, the National Automated Clearing House Association plans to announce today a test to cut paper-handling costs in the clearing of millions of small rebate checks.

A Boon for Eccho

The agreement between J.D. Carreker, based in Dallas, and Newtrend in Orlando will enable Eccho to recruit more local banks and clearing houses to the system, said David Walker, a principal at J.D. Carreker.

"The average local clearing house has five or six banks in it, and some would be using Unisys," Mr. Walker said.

Local check clearing accounts for some 75% of the average bank's check volume, he added.

So far, about 17 banks are exchanging information taken from magnetic-ink lines on checks using the electronic clearing house, but all of these banks use check processing equipment from International Business Machines Corp.

Truncating the Flow

The test by Nacha aims to truncate the flow of rebate checks issued to consumers by businesses. Historically banks have been reluctant to adopt truncation because customers prefer to get their checks back. …

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