No matter who does E-payment, it's a complex biz, and one institution who will have a lighter load with less paper checks is the Federal Reserve Branch Processing Centers:
A stark example of the role the Federal Reserve Branch Processing Centers play in the processing of paper checks was revealed to me a month or so ago:
step 1) As accountant at a private corp., I prepared a check for $39K, payable to our lender bank (for monthly interest on loans), to be drawn on our checking bank (two different banks). I mailed the check via postal service.
step 2) Five days later, our lender bank received the check, and credited our account (date and amount showed on monthly statement, received by me later). Where did our lender actually get the money from? Not our checking account.
step 3) Our lender (the payment recipient), bundles all checks made payable to them and ships them via truck to a Federal Reserve Branch. What they are saying is "we don't want to submit all these checks back to the various payers' banks, so you just give us the money now for the total, and you sort them out and send them". The Federal Reserve Branches willingly provide this service, processing very large quantities of checks daily. In this, the Fed is providing the sort of service that TEX has it's sights on for electronic form of payments.
step 4) Surprise. I get my bank statement and cleared checks, but I don't find a check for $39K. Payment has been made, recipient received check and funds, but where is the check? It's at the Federal Reserve Branch (I and our lender the payment recipient weren't sure until our checking account bank finally received the check). It stayed there at the Federal Reserve Branch for 44 days (time between when our lender the payment recipient got their money from Feds, and when the money was actually removed from our checking account). I've balanced many a bank statement in my day, but this is the first time I've seen a check actually get lost at a Federal Reserve Branch, so they actually do a phenomonally good job, considering their volume and task complexity. |
