Endpoint Exchange, Viewpointe Link Up.

A useful step toward widespread check image exchange was taken last week when Endpoint Exchange LLC and Viewpointe announced they were connecting their systems to allow their members to exchange check images. They will clear them through The National Clearinghouse, based in Dallas, which is where both parties have been clearing their check traffic all along.

As expected, the partners in the deal hold it in high regard: "This is the transformation that everyone's been waiting for," says Jeff Detterick, general manager of Endpoint. "Endpoint already had thousands of financial institutions ready to receive [check images], and Viewpointe has an archive with 60 percent of the U.S. check volume in it."

It's hoped that the combined traffic of the two networks will create a critical mass to propel the check imaging enterprise more deeply into the financial system. Bank of America, which on Nov. 18 sent the first check images over the co-joined systems to Endpoint users, says it hopes to be sending as many as 50 million checks to Endpoint banks over the network every month. The arrangement isn't compulsory, though; other members of Viewpointe need to opt in to the arrangement if they want to use it.

Endpoint is owned by Metavante and serves some 4,000 financial institutions, many of them not very large; Viewpointe is owned by a consortium of large banks including Bank of America, J.P. Morgan Chase & Co., U.S. Bancorp and Wells Fargo & Co.

The partners have worked out a common rules and settlement platform, a mechanism through which every member of either network can talk to another. "We really laid out all the hardware to make more rapid adoption at the bank level to take off," says Detterick. That hardware modification includes a direct connection between the Endpoint and Viewpointe central switches, making direct communication between Endpoint and Viewpointe members possible. That ability, he thinks, will encourage more image traffic, creating a so-called virtuous cycle in which volume begets volume.

"The more [volume] you do, the more attractive the value proposition becomes," he says. "So a lot of banks that have been sitting on the sidelines will now have a compelling reason to jump in, because now a substantial majority of their items can clear electronically."

Endpoint hopes to pick up another 10 percent of the depository institution universe as members over the next six months, says Detterick. Those banks will be larger than the banks now operating within Endpoint, and thus will sweep larger check volumes into the co-joined network, he thinks.