Citigroup Announces Pilot for Electronic Check Conversion for Corporate Clients Developed in Response to the Check Clearing for the 21st Century Act
3 November 2003, New York - Citigroup Global Transaction Services, a unit of Citigroup (NYSE: C) and a leader in transaction processing announced today that it is in the final phase of a pilot after one year of testing an electronic solution in response to the Check Clearing for the 21st Century Act. This solution allows corporate clients to make check deposits by creating an electronic version of a paper check which Citigroup then uses to create an image replacement document (IRD) - also known as a 'substitute check' - for presentment at the paying bank. In the future, the ability to create an ACH debit to present to the paying bank will also be added.
President Bush signed the Check Clearing for the 21st Century Act into law on October 28, 2003 and the new law, which takes effect in one year, allows IRDs to be considered the legal equivalent of a paper check. Instead of physically depositing checks at a local bank, corporations can use a special scanner to capture an image of the check along with the amount and MICR information. These images are then routed to a print center near the paying bank where an IRD is printed for timely presentation and settlement. This substitute check includes all of the information contained on the original check and will be processed in the same manner.
"The physical movement of checks was a concern after September 11th and many market participants were interested in accelerating the move to electronic processing. The passing of this law has accelerated corporate interest in clearing checks in the most efficient manner and for many of our clients, this innovative solution allows them to streamline check handling, expedite funds availability while extending their deposit deadlines and gain efficiencies in their back office. Further, clients can potentially consolidate bank accounts, providing easier reconciliation as well as lowering fees for services such as account maintenance and cash concentration," said Maria Mandler, Managing Director and Head of North America Cash Product Management, Citigroup.
"We are very pleased with the results of this pilot and we intend to role out this solution to all of our branches throughout the United States. It provides us with a tremendous opportunity to consolidate check deposits with only one bank, ultimately depositing all of our checks electronically," said Ron Whitaker, Assistant Treasurer, Raymond James and Associates.
About Citigroup
Citigroup (NYSE: C), the preeminent global financial services company
with some 200 million customer accounts in more than 100 countries,
provides consumers, corporations, governments and institutions with
a broad range of financial products and services, including consumer
banking and credit, corporate and investment banking, insurance, securities
brokerage, and asset management. Major brand names under Citigroup's
trademark red umbrella include Citibank, CitiFinancial, Primerica,
Smith Barney, Banamex, and Travelers Life and Annuity. Additional
information may be found at: www.citigroup.com.
About Citigroup Global Transaction Services
Citigroup® Global Transaction Services is a leading provider of
integrated cash management, trade and securities services for corporations,
financial institutions, intermediaries and governments around the
world. With over $ 92 billion in average liability balances, more
than $ 5 trillion in assets under custody and the largest proprietary
branch network, Citigroup's award-winning operating systems and
Internet-based delivery channels enable clients to manage and monitor
working capital and investments more efficiently, streamline transaction
processing cycles, and re-engineer receivables and payment processes.
Citigroup® Global Transaction Services provides clients with access
to Citigroup's full range of capabilities and solutions along with
an on-the-ground presence and in-depth knowledge of more than 90
local markets. For additional information, see www.transactionservices.citigroup.com.
Citigroup Global Transaction Services is part of Citigroup's global
corporate and investment bank, which provides complete financial
solutions to corporations, governments and institutional investors
in more than 100 countries. Award-winning businesses include corporate
and investment banking, sales and trading, transaction services,
commercial finance and insurance products. Additional information
can be found at: www.citigroupgcib.com.
