The Check is in the E-mail

Back in last millenium, before the rampant post-9/11 Federal paranoia,
I would take my Business students on the tour of Boston’s Federal Reserve
Bank each fall. They were always impressed by the fact that the building
itself (across from South Station) is sheathed in enough sheet alumininum
to make 4 million Coke cans, and marveled at the counting rooms where
workers inspected stacks of bills piled to the ceilings of plexiglass
cubicles containing 10-12 million dollars at a time, looking for worn,
ripped, ragged or otherwise ready-to-be-retired bills. At the end of
the tour we each would get a little baggie of shreaded up
bills.

The most impressive room of all, however, was the huge, multi-acre exhibit
hall where every night, all night, hordes of nocturnal federal moles
process over 6 million checks from around the New England region, physically
inspecting and stamping each one and then electrocically transferring
the funds from the payer’s bank’s Federal Reserve account to the payee’s
bank’s account. So many workers pushing so much paper throughout the
night never failed to amaze the students at its sheer scope and innate
stupidity – there must be a more efficient way to clear checks. Appearantly
the Fed agrees, finally.

Though banks and billing companies have tried
in recent years to convince consumers
to
pay more
of their
bills
over
the
Internet
or
through
electronic
payments, most people still write paper checks. American consumers
use checks for three of every five noncash payments, according
to the Federal Reserve.

Now banks and billers are beginning to turn some of those checks
into electronic payments automatically. The new payment system,
called accounts receivable
conversion, or ARC, allows banks to detect fraudulent checks more quickly
and reduces the time it takes for checks to clear. But the new system
also means that payments are deducted more quickly than before,
which could
cause problems for check writers who are unaware of the system and
who try to time their bill payments carefully.

from
the New York Times