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. On an average day during October 2008, 12,385 institutions received almost 41 million check images for posting. These total 10.3 billion checks per year and $13.4 trillion. Also, another 12.2 million checks per day that were sent as images and delivered to paying institutions as substitute checks. These totaled 3.1 billion checks per year and $3.9 trillion. 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.

Highlights: Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Number of receiving R/Ts grew from 6,088 to 17,246 from November 2006 to October ,246 routing transit numbers represents 12,385 institutions or approximately 78% of all U. S. institutions that received check images. Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sept-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sept-08 Oct-08 # of R/Ts Receiving Images Number of R/Ts Receiving Images

$0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 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 monthly dollar amount received grew from $607.6 billion to $1.6 trillion. Annualized October 2008 dollar amount = $17.4 trillion/yr. $17.4 trillion is 42% of the total dollars cleared via check payments. Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sept-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sept-08 $ Amounts in Billions $ Amounts of Images & Substitute Checks Forward Collection Only Oct-08

Highlights: Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Average daily image volume grew from 11.7 to 40.8 million from November 2006 to October October 2008 volume annualized is 10.3 billion images received per year. Based on the Fed’s 2007 Payments Study this is 34% of all checks paid in Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sept-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Oct-08 Sept-08 # Items in Millions Average # of Images Received /Day

,000 1,100 1,200 1,300 Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges 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 24 month period Image-based clearing volume grew from 428 to 1,223 million / mo with 77% of the volume cleared by image in October 2008 (23 days in Oct). The annualized October ‘08 volume (13.4 billion items/yr.) is approximately 44% of total check volume paid. Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sept-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Oct-08 Sept-08 # Items in Millions # of Images & Substitute Checks Forward Collection Only Substitute Checks Images

Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges Qtr 1 '05Qtr 2 '05Qtr 3 '05Qtr 4 '05Qtr 1 '06Qtr 2 '06Qtr 3 '06Qtr 4 '06Qtr 1 '07Qtr 2 '07Qtr 4 '07 Qtr 2 '08 Qtr 3 '08 Qtr 3 '07 # Items in Millions Average # of Images Received /Day Qtr 1 '08 Highlights: Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Average daily image volume grew from.08 to 40.4 million from Qtr to Qtr Qtr volume annualized is 10.2 billion images received per year. Based on the Fed’s 2007 Payments Study this is 33% of all checks paid in 2006.

Highlights: Chart reflects images checks received by DFIs for payment from other DFIs or an intermediary. The quarterly dollar amount of images received grew from $1.7 billion to $3.4 trillion. Annualized Quarter dollar amount = $13.4 trillion/yr. $13.4 trillion is 32% of the total dollars cleared via check and is about 4.5 times the sum of all debit card and credit card payments. Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Qtr 1 '05Qtr 2 '05Qtr 3 '05Qtr 4 '05Qtr 1 '06Qtr 2 '06Qtr 3 '06Qtr 4 '06Qtr 1 '07Qtr 2 '07Qtr 4 '07Qtr 1 '08 Qtr 3 '08 Qtr 3 '07 Qtr 2 '08 $ Amounts in Billions $ Amounts of Images & Substitute Checks Forward Collection Only