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. More than 14 billion annual check payments totaling $17.5 trillion per year have already moved from the traditional paper-based clearing process to improved image-based processes. On an average day during March 2008, almost 9,800 institutions received more than 42 million check images for posting. These total 10.6 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. CheckImage Collaborative Communications Work Group

Highlights: Chart reflects volume received by DFIs for payment from other DFIs or an intermediary. Average daily image volume grew from 17.9 to 42.1 million or by 135% from March 2007 to March March 2008 volume annualized is 10.6 billion images received per year. Based on the Fed’s 2007 Payments Study this is 35% of all checks paid in Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges # Items in Millions Average # of Images Received /Day Million Images / Day Million / Day

Highlights: Chart reflects the number of paying bank R/Ts receiving check images. Many R/Ts through March 2008 were for individual institutions. The number of R/Ts that received images increased between March 2007 & March 2008 from 8,508 to 13, ,941 routing transit numbers represents almost 9,800 institutions or approximately 60% of all U. S. institutions are receiving check images. Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges # of R/Ts Receiving Images Number of R/Ts Receiving Images Image Receiving R/Ts 13,941

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 to 1,177 million / mo or by 89% with 75% of the volume cleared by image in March 2008 (21 days in Mar). The annualized March ‘08 volume (14.1 billion items/yr.) is approximately 46% of total check volume paid. Data Sources: Transactions settled through the Federal Reserve, PaymentsNation, SVPCO and other local / regional exchanges # Items in Millions # of Images & Substitute Checks Forward Collection Only Substitute Checks Images

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 $826 to $1,458 billion / mo or by 76%. Annualized March 2008 dollar amount = $17.5 trillion/yr. $17.5 trillion is 42% of the total dollars cleared via check and is about five 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 $200 $400 $600 $800 $1,000 $1,200 $1,400 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 $ Amounts in Billions $ Amounts of Images & Substitute Checks Forward Collection Only