Quote:
Originally posted by rowan
Is this only for paper checks or will we also have realtime verification for online check payments?
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The purpose of this new system is to elimate the need for banks to transport and handle paper checks after they are written.
Now when you deposit someones check your bank will make a digital scan of it and then electronically send that digital image to their bank and the clearing process occurs in real time.
Your bank then destroys the paper check and the digital image becomes the legal copy of the check.
In the old system banks had to physically transport checks from bank to bank to clear. This costs them billions of dollars.
This new concept came about because on 9/11 when the FAA shut down the air transport system the banks couldn't clear checks because all the checks were stuck on planes.