Wells Fargo buys into check image sharing

It plans to use Viewpointe's archive to store and share electronic checks

Wells Fargo & Co. this week announced that it has bought into Viewpointe Archive Services LLC in order to share electronic check images with other banks and reduce the amount of paper checks it ships around the country.

The use of Viewpointe's check archive and ImageShare exchange service also will free Wells Fargo from the need to set up connections with individual banks.

New York-based Viewpointe, which was founded by Bank of America Corp., J.P. Morgan Chase & Co. and IBM in 2000, enables its members to send check images to a central repository. Banks can then set rules for sharing the images with one another.

"The opportunity now with Viewpointe is to move to something we call 'image on demand,' which is loading images onto a common archive, as opposed to shipping those images and exchanging them one bank at a time," said Mitch Christensen, executive vice president of payment strategies at Wells Fargo.

Christensen said the San Francisco-based bank has been sharing check images with the Federal Reserve Bank and The Clearing House in New York for years through its own data warehouse. But Wells Fargo, which captures 4.5 billion check images a year, has never used Viewpointe's services and will have to establish a network connection with the archiving company.

The bank also has to migrate its existing check images to Viewpointe and create a system to transmit new images as they're captured at its regional scanning centers.

In addition, Wells Fargo is about to kick off a 12- to 18-month project to install check-image scanners at the teller windows in its 6,000 branch offices throughout the U.S. Images captured on those devices will be shipped directly to Viewpointe as well, according to Christensen.

The financial terms of the deal between Wells Fargo and Viewpointe weren't disclosed, and Christensen declined to say how much it will cost the bank to link up to Viewpointe's systems and deploy the branch-office scanners. He also wouldn't say how much using the Viewpointe service is expected to save Wells Fargo on costs.

David Medeiros, an analyst at TowerGroup in Needham, Mass., said Wells Fargo's foray into the check-image-sharing world will likely push banks that regularly do business with it to become Viewpointe users themselves.

The door for exchanging check images between banks was opened by the Check Clearing for the 21st Century Act, or Check 21, which took effect Oct. 28. Check 21 allows banks to substitute image-replacement documents for original paper checks, which can then be destroyed.

Viewpointe members SunTrust Banks Inc. in Atlanta and First Horizon National Corp. in Memphis last month claimed to be the first banks in the U.S. to agree to share check images (see story).

This week, the banks began sharing those images on a test basis, said Lenora Thompson, group vice president of SunTrust's banking services division.

Wells Fargo's entry "moves us closer to our long-term vision of not having to move [electronic] checks at all until they're needed," Thompson said.

Copyright © 2005 IDG Communications, Inc.

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