Citigroup Global Transaction Services is introducing an electronic cheque conversion service for its corporate clients.
The US moneycentre is currently in the final phase of a pilot testing the service which allows corporate clients to make cheque deposits by converting paper cheques into electronic image replacement documents (IRD). The IRDs can then be presented to a paying bank.
In October President Bush signed the Cheque Clearing for the 21st Century Act, which takes effect in one year and allows IRDs to be considered the legal equivalent of a paper cheque.
Instead of physically depositing cheques at a bank, corporations can use a scanner to capture an image of the cheque along with the amount and MICR information. These images are then routed to a the paying bank where an IRD is printed for presentation and settlement.
Maria Mandler, managing director and head of North America cash product management, Citigroup, says: "For many of our clients, this innovative solution allows them to streamline cheque handling, expedite funds availability while extending their deposit deadlines and gain efficiencies in their back office."