AVON, Conn. -- COCC continues to grow its Check 21 business, this time announcing plans to convert a majority of its check-processing clients to the Federal Reserve Bank's image inclearing product.

The conversions to the FedReceipt Plus system "go a long way toward increasing the overall percentage of interbank check image collections in the Northeast," according to Mike Stewart, regional sales manager for the Federal Reserve Bank of Boston.

Currently, 16% of COCC's outgoing cash letter clients use image inclearing, while 40% of them exchange images electronically, the company says.

COCC provides image processing to 108 banks and credit unions, supporting outgoing cash letters, inclearing, returns and statements. It also provides core processing to 144 institutions, 32 of them credit unions, on an Open Solutions platform, and was one of the first processors to get into end-to-end image processing as Check 21 took hold and then became law in 2004.

The company currently processes just more than six million checks and issues 1.1 million statements a month electronically, says Joseph Lockwood, COCC's senior vice president and chief technology officer.

Lockwood says COCC's current pipeline of image implementations will bring the percentage of clients who use image exchange to 55% of his client-owned firm's client base. He says the conversion to image inclearing is a natural evolution.

"The advantages of image inclearing are so strong that we could see no reason not to convert our remaining paper-based check processing clients," Lockwood says.

"This is where the industry is moving. This is where COCC's open technology shows its advantage. This is the time to show our check processing clients what we can do for them," he says.

"Image inclearing offers big improvements in client efficiency and a better means for recovering from weather and other disasters," he said. "Plus, our clients will be contributing to the greater acceptance of image exchange, which is good for the industry as a whole."

Lockwood says his company has been imaging every check it processes since 2001 and that branch capture and other image exchange services has helped COCC extend its reach into beyond southern New England into New York, Pennsylvania, Ohio and Illinois.

The Fed says it has seen paper checks decrease in use by 30% in the past three years and has gone from 45 check-processing centers to 22.

"Through Check 21 business relationships like this one between the Federal Reserve Banks and COCC, the check payment system is being transformed from one that has been largely paper-based, to one that is all electronic, thereby improving both service and reliability of payments for our customers," says Stewart at the Fed in Boston.

Fewer processing centers mean greater distances for paper checks to travel, adding to the cost. Image-based systems also offer accelerated posting and earlier returns processing, Lockwood says, and the number of fraud prevention tools COCC can offer clients more than doubles when they adopt image processing.

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