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Payment processing is undergoing a revolution. The demands of new payment and clearing methods, coupled with regulatory changes in banking, are forcing payment and clearing operations to move away from the traditional paper clearing stream to an electronic data based and even electronic image exchange based route, for quicker clearing and resultant accelerated deposits and returns.
In the US this move had come in the form of ARC earlier, which allowed processing certain types of remittance payments, wherein electronic data extracted from the cheque image was fed to an electronic exchange for clearing. More recently in US, the introduction of Check21 resulted in cheque clearing using and the electronic image exchange route, with IQA/IUA standards.
In India and many Middle East and Asia Pacific countries, a similar cheque image based clearing is being adopted in a phased manner.
- CTS or Cheque Truncation System, allows for image exchange based clearing, where permitted by the Central Regulatory Bank.
- Automated Cheque Clearing, allows
for automated image based cheque processing at a bank's
service branch, with multiple benefits that facilitate
cheque clearing. However, only the physical cheques
are presented to the Central Regulatory Bank, as the
presenting Central Regulatory Bank associated with
the service branch, has not yet adopted CTS and can
accept only paper cheques. Automated Cheque Clearing,
at times serves as an intermediate step before CTS
based image exchange clearing.
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