Courtesy of Payment News, the topic of payment convergence appeared at the NACHA conference.

Payments News: NACHA’s Take on the Future of Payments: Convergence – May 11, 2006

“Best Clearing” was described as using a combination of image technology and the ACH system to optimize cost and accelerate adoption of electronic processing of checks. Checks would be imaged by the collecting bank, stored locally, and then cleared through the ACH system. Images would be made available by collecting banks through some kind of standardized access model and not stored twice as they are today (once by the bank of first deposit, and then again by the paying bank).

The argument was that the ACH “end points” are in place, but that not enough items are eligible, while all items are eligible through Check 21, but the end points aren’t in place. Combining the two would create the “best of both worlds”, enabling ubiquitous electronic processing without the redundant infrastructure and costs.

This came out of a conference topic, that received little press.

Although not really covered by industry press, I thought one of the most interesting and important topics at the conference was convergence. Senior executives from Zions Bank, Bank of America, North American Banking Company, and the Federal Reserve held a panel discussion with NACHA CEO Elliott McEntee promoting “Best Clearing”, which NACHA positioned as the headline event of the conference.

Relevance to Bankwatch:
This seems to be a US specific thing, given their extraordinarily high continuing focus on cheques, compared to the rest of the world.  So they continue to look for ways to pave the cow path by ensuring they manage the paper effectively …. hmmmm

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