CheckImage Collaborative Communications Work Group Key Messages: Paper checks are being transitioned to electronic images of checks at a pace that is unprecedented. Check images are currently collected in two forms, as substitute checks and as check images. Substitute checks assist in evolving traditional paper check clearing to image-based clearing. As a precursor to full check image exchange, the number of substitute checks is a positive indication of the acceptance of image exchange. About 13.5 billion annual check payments totaling $17.6 trillion per year have already moved from the traditional paper-based clearing process to improved image-based processes. On an average day during January 2008, more than 8,900 institutions received almost 40 million check images for posting. These total 10 billion checks per year. This CheckImage Collaborative image clearing report reflects transactions settled through the Federal Reserve, PaymentsNation (formerly NCHA), SVPCO and local / regional exchanges. When the same payments were cleared through two or more of these organizations, those payments were counted only once. The 2007 Federal Reserve’s Payments Study shows that the volume of checks (both written and paid) continue to be larger than debit card, credit card or ACH transactions. The report also shows that the dollar amount of checks increased from 2003 to 2006 from $40 to $41.7 trillion.

Average # of Images Received /Day 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Average # of Images Received /Day Highlights: Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Average daily image volume grew from 15.2 to 39.5 million or by 160% from January 2007 to January 2008. January 2008 volume annualized is 10 billion images received per year. Based on the Fed’s 2007 Payments Study this is 33% of all check cleared in 2006. 39.5 Million Images / Day 15.2 Million Images / Day # Items in Millions Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges

Number of R/Ts Receiving Highlights: Chart reflects the number of paying bank R/Ts receiving check images. Many R/Ts through January 2008 were for individual institutions. The number of R/Ts that received images almost doubled between January 2007 & January 2008 from 6,975 to 12,963. 12,963 routing transit numbers represents more than 8,900 institutions or approximately 54% of all U. S. institutions are receiving check images. 2,000 4,000 6,000 8,000 10,000 12,000 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Number of R/Ts Receiving Images Image Receiving R/Ts 12,963 # of R/Ts Receiving Images Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges

Images # of Images & Substitute Checks # Items in Millions 200 400 600 800 1,000 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 # of Images & Substitute Checks Forward Collection Only Highlights: All checks were imaged before reconversion to substitute checks. Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Over 13 month period Image-based clearing volume grew from 530 to 1,123 million / mo or by 112% with 74% of the volume cleared by image in January 2008 (21 days in Dec). The annualized January ‘08 volume (13.5 billion items/yr.) is approximately 44% of total check volume cleared. # Items in Millions Images Substitute Checks Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges

Forward Collection Only $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 $ Amounts of Images & Substitute Checks Forward Collection Only Highlights: All checks were imaged before reconversion to substitute checks. Chart reflects checks received by DFIs for payment from other DFIs or an intermediary. The dollar amount grew from $771 to $1,468 billion / mo or by 90%. Annualized January 2008 dollar amount = $17.6 trillion/yr. $17.6 trillion is 42% of the total dollars cleared via check and is almost five times the sum of all debit card and credit card payments. $ Amounts in Billions Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges