Technology Improves the Future of Checks
Technological improvements in the public and private clearing sectors continue to decrease the cost and increase the speed of check handling. Simultaneously, point-of-sale pilot programs attempt to determine further streamlining opportunities. With all of the changes over the last three years, it does not take a particularly large leap of imagination to conjecture that the next Federal Reserve study might show check processing costs declining within any realistic quantity.
It might well be the case that within three years, only one massive central processing facility would be required to cost effectively satisfy the nationwide check processing needs, even if the current 25% of all checks cleared by the Fed were to grow to 100% of all checks. When one pauses to consider the sorts of technologies that are likely to be in place between now and then, the idea of one central processing point is not unrealistic if technology investments continue at the current pace.
In all likelihood checks could be scanned at or near their point of collection and the image transmitted to a single center where the clearing of the transaction would take place. Neural networks and other high-level computer tools would assist in interpreting handwriting and ensuring the validity of the signature. Massively parallel computers would permit a single processing unit. There would be no need to scatter check-processing centers around the country as is the case today. But then what would we do with all the Federal and private investments that have already been made to handle paper checks? Maybe current check processing techniques, cost, and speed are all just fine the way they are?
In any event, it is unlikely that continued investments will be made in the check clearing mechanism or at the point-of-sale unless there is a widespread belief that many billions of checks will need to be processed, but then that is what we were saying just three years ago.
If you want to know even more about the direction of the paper check, the United States Check Study Results of 1997 Research is now available. Call (800)757-4441 for more information.
