CA2113553A1

CA2113553A1 - Electronic check presentment system

Info

Publication number: CA2113553A1
Application number: CA002113553A
Authority: CA
Inventors: Thomas S. Stephens; Daniel R. Mills; Richard A. Sherman; Harry B. Drollinger; George B. Anderson
Original assignee: J D CARREKER AND ASSOCIATES Inc
Current assignee: J D CARREKER AND ASSOCIATES Inc
Priority date: 1991-07-17
Filing date: 1992-07-10
Publication date: 1993-02-04
Also published as: US5237159A; US5532464A; WO1993002424A1; US5412190A

Abstract

An Electronic Check Presentment System provides a bank with a fully automated capability for participating in the electronic exchange of check data. It allows banks that utilize the system to take MICR data that has been obtained through check capture methods (107), selectively extract particular check records and place them in the form of electronic cash letters (105), transfer (115) the electronic cash letters to selected banks, receive electronic cash letters from other banks, reconcile the electronic cash letters (105) against the paper cash (113A, B) letters when they arrive, and input the electronic MICR data into a database (107) responsible for maintaining check records.

Description

WO 93/02424 PCr/U~92~05780 2 1 ~ 3 3 ~ 3 ELECTRON~C ~HECK PRESE~IT~NT SYSTE~
A portion of the disclosure of this patRnt document contairls mateAal which is subject to copydght protection. The copyright owner has no objection to the facsimile reprocluction by any one of the patent disclosure, as it appears in the Patent and Trademark Office patent files or records, but otherwise reserves all copy~ghts 5 whatsoever.
Te~nic~l Field Of The In~ention This invention relates to the fiel~ of electronic check processing, and more s~eci~cally, to a da~a processing :methodology and apparatus that allows all banks that utilize ~is invention to dectlonically t~ansfer and receive check informatiotl.
10 ~ackground Of The I~velltion For some ~me, ban~g instituldons have handled the presentment of checks for payment in a manual fashion. At a spe~ified time each day, a bank sorts all checks pleseraed to h into bundles,~ with ~e ~undles per~aining to particular banks on which th y are drawn ~the "d~awee banlc"). :As~ e checks-are so~ted forparticuIar destination 15 b~, t~ey are gathered into batches of about 300~Ghecks. One or more of ~hese batchcs a~e then aggregated for shipment to ~e des~nation or "payor" bank. A cover letter is attached to each~ shipment OI chec~s ~at summa~es the contents of the shipment. Such summa~r infonna~on comprises ~e name of the payor bank, a number associated with the name of t}~ drawer bank (called the roudng transit number), the 20 numbe~ of checks in the shipment and the total dollar amount of all of the che~ks in l;he batch. The o~ver letter is termed a Cash Letter. The presen~ng bank ~hen ansfers to ~e p~yor banlc ~e "Cash Letter", whlch ~ncludes the cover lettPr and the blmdle of chec~.
When the drawee bank :receives the Cash Letter, it vemSes that the contents of ~: 25the cash letter, i.e., the checks, agree witb the totals contained on ~he cover letter.
The bank a~so determines whether enough money exists in the payor customer's WO 93/0242q PCr/US92/05780 2113 S~ 3 -2-account to cover payment of the check, and either accepts or rejects payment of the check. The payor bank then notifies the presenting bank regarding any balancing discrepancies or any items which are to be returned.
The above procedure is an over-simpIification of the process established for 5 clearing checks between banks. However, it is sufficient to demonst~ate the problems associated with such a process. A first problem resulting from the above process is the delay between tbe time a check is first deposited at the presenting bank and the time the drawee bank accepts or rejects the check. The payor bank has the choice of either placing a hold on the depositing customer's bank account until it is notified of10 acceptance by the payor bank, or it pays out the money to the presenter and illcur the risk that the check will be rejected by the drawee bank.
Many banks choose not to incur such a risk, and therefore place a hold on the presenter's banlc account until it is noti~led that the check has been accepted.However, the time that it takes for the payor bank to be notified that a check has been 15 accepted or rejected may take as long as 7 to 10 days. The Expedited Funds Availability Act of 1987, however, places limits on the length of time that a bank may retain a hold on a customer's funds. In most cases, only two days are allowed for local items, and only three days~ for non-local items. These 'dme limits ca~i severely expose a bank to risks of loss~ and fraud by forcing a ~bank accepting customers deposits to 20 release funds to that customer pnor to verification that those fi~nds are, in fact, collectable from ~e payor institution.
To overcome the problem of delay, banks have attempted to automate the process of gathenng~ checks irlto cash letters, sending and recei~ring cash letters, and reconciling ~hese ~h letters against their contents. Such attempts at automa~don have 25 included the installation of check sorter machines ~at scan checks at very high speeds, and sort these checks into bundles associated with payor bahks. The sorter "reads"
information contained on t}~e checks such as the routing transit number, the drawer's account number, the check number and tlie amount of the check. This infonnation is stored in a line of symbols at the bottom of each check in MI~R (Magnetic Inlc 30 Chara~ter Recognition) fonTl. Check sorter machines have been used quite successfuIly and are well known in the art.

WO 93/02424 2 1 1 3 ~ ~ ~ Pcr/us92/~5780 AnothOE attempt at automating the checlc process is the use of computer systems to record and manage the information associated witb the check sorting procedure.
Sucb computer systems interface with the check sorter machines and allow the compute~ systems to build database information associated with each check tbat is read.
S Tbis allows an operator of a computer system to obtain information on checks that have been read such as the total number of checks drawn on specific banks and the total dollars of all cbecks drawn on specific banks. One such system that accomplishes this task is the IBM CPCS (Check Processing Control System).
- Although both of the above attempts have benefitted the banking industry, they 10 have failed to address the problem of delay associated with the transfer of cash letters between banks. Better t~nsportation, overnight express, and other services have helped to improve the transfer of cash letters, but the transfer of the information contained in the cash letters has still been dependent on the physical delivery of the casb letters to the drawee bank. Such dependence on the physical transfer of the cash 15 letters perpetuates the delay associated with acceptance or rejection of particular checks.
Another ploblem associated with~the transfer of cæh letters between banks is the inability of eith bank to specify, for identification puIposes, a particular check that w~s sorted by the other banks system. As each check is captured on the check 20 sor~ng machines, a micK~film image is captured, and a unique "item sequence number" is assigned by ffle CPCS system. The system then maintains a da~abase ofitem sequence numbers ~so that it can later identify and find individual checks wi~in the numerous~rolls of micr~film. However, since each bank assigns its own item sequence numbers, ~ere is currently no way for one bank to c~oss ref~rence its own 25 i~em sequence number to that of ano~er bank.
Although means~ have come~ intQ existence that allow for wire transfer, or el~ctronic transfer of funds from banks, see Deming, U.S. Patent No. 4,823,264 and Case, U.S. Patent No. 4,270,042, ~ese systems have dealt with transfer of funds between a banlc and an indmdual user. No system to date has allowed banldng 30 systems to electro~ly tr~nsfer, and control the transfer of, the large volume of checks deposited in their institutions eve~y day.

SuBsTlT~

WO~3/02424 PCI/USg2/05780 ~ 1 1 3 .~ 5 3 ~

Summary of the Invention It is therefore an object of this invention to provide a way for banks to electronically transfer cash letters and improve the delay resulting from physical transfer.
S An additional objective of this invention is to provide banks with a method for minin~izing its risk of exposure to check loss and check fraud due to the legal limits placed upon banks for placing a hold on the ~unds of their customers.
Another object of this invention is to allow a bank that utilizes electronic check presentment to reconcile the received electronic cash letters against the physical paper 10 cash letters when they arr~ve. - ; A . . `; ''li ' . ' 'J' " " ' " '' A further object of this invention is to allow both the depositing bank and the paying bank to re-associate the item sequence numbers assigned by both banks, and by the electronic check presentment system, to allow for easy cross-referencing.
An ad~itional object of this invention is to provide for elec~onic check 15 presentment without changing ~e existing methodology associated with paper check presentment.
A ~urther object of this invention is to u~lize existing check databases and check sor~ng machines in the electronic check presentment process so as to minimize the impact on present check presentment procedures.
The Elec~onic Check Presentment System provides a bank with a fully automated capability for participating in the elect~onic exchange of ch~ck data. It allows banks that u~lize ~he system to take MICR data that has be~n obtained through checlc capture methods, selec~dvely ex~act particular check records and place them in - the fonn of elec~onic cash letters, transfer ~e electronic cash letters to selected banks 25 via exisdng compute~-to-computer da~a transf~r technology, to receive electronic cash letters ~rom ather banks, r~oncile the elec~onic cash leKers against the paper cash letters when the physical paper items alTiYe, and input the elec~onic ~ICR dat~ in~o a database r~sponsible for maintai~ng check reco~ds.
The Elec~onic Check Presentment System uses elec~on~cs to move check 30 information efficien'tly between presenting and paying banks~ and improves ~ecollection and return processes by the amount of ~dme required for ~ansportation of the checks between banks and by allowing banks to debit customer accounts from Sl,lBSTlTU~E Sl IEET

WO93tQ2424 211355~ Pcr/usg2/os78~ ~

electronically received items. Depositing banks begin the funds collec'don process by transmittillg MICR line information while contialuing the presentment of the physical ch~cks via ground and air transportation. Checks de~osited on a Monday can be presented electronically to the paying bank anywhere in the country that same evening.
S Because electronic check presentment can be completed faster than physical check presentment, the check presentment process can be accelerated by at least one day.
To tllis end, the applicant has initiated the fonnation of BCCHO (Electronic Check Clearing House Organization) as a cooperative venture to implement electronic check presentment. The organization has designed a standard ECCHO format that 10 mL~rors a paper cash letter with detail records (checks) and summary records (batches and cash letters). When the presenting bank produces a paper cash letter, it also creates an electronic cash letter from its exisang check capture files to send to the paying banks. After the paying bank receives and captures the paper checks, it then reconciles the paper checks Wit}l the electronic items.
Brief Description of the Drawings ~IG~lRE 1 is a sche~c representa~on of an electronic check presentment system.
FIGIJRE 2 is a schematic representation of a send sub-system for the electronic check presentment system.
~IGI~RE 3 is a schematic representation of an alternate embodiment of the send sub-system. ~
FIGURE 4A is a~schematic block re~resentation of a preprocessor f~r opera~don in a roceive subsystem ~of the elechonic check presentment system.
~IGIlRE 4B is a schematic block re~resenta~on of paper-less MICR capture ~poration in the receive sub-system; the paper-less MICR capture process uill allow he CPCS to process electronically roceived items as if they were physical paper.~IGURE 4C is a schematic block representation of ECP s~ip f;le wa~ehouse procoss in a receive su~system.
~; ~ ~GI~RE S is a schema~c bl~ck represent~on of a first paper sorting in the 30 receive sub-system.
~ GURE 6 is a schematic block representation of an ECP r~oncilement process within the elec~onic check presentment system.
:

2C!TITI ITI~ C~UI~T

WO 93/02424 - Pcr/uss2/o578o 2~135~3 -~

FIGURE 7 is a block schematic re~resentation of a second paper pass directed ne sor~ operation of the receive sub-system.
~IGI~RE 8 is a block schematic representation of an end-of-day settlement function in the receive subsystem.
S ~IGI~E 9 is a block schematic representa~on of a third paper pass ~irected fime sort operation of ~e receive sub-system.
Detailed Description Of The Drawings ~efer~ing to ~IG11RE 1, partner banks 101 are members of an electronic check clearing house organization ~ECCHO) 103. There is no limit on the number 10; ~of banks that may participate in the ECCHO. Typically, each par~ér bank in the ECCXO has a check capture system 107, such as the industry standard Check Processing Control System (CPCS) of International Business Machines Corporation,and a demand deposit accounting (DDA) system 109. Both are data processing s~stems having various configurations well known in the art. Additionally, when participating 15 in the ECCHO, each bznk has an Electronic Check Presentment (ECP) System 105 that is coupled to the CPCS. The ECP system may run on the same data processing equipment or computer systern as the CPCS or DDA. The CPCS, DDA and ECP
systems are used as follows in an elec~onic presentment system.
Pa~ner banks lOlA and IOIB receive paper checks 111, usually deposited by 20 their respechve customers.: ~ After their deposit, the checks are "captured" by the CPCS, usually after the close of business on the day they are received. The capture process begins by passing the checks through check sorting machine~ (not shown). The sorters read cha~ers on each paper check that are printed with magnetic ink and are provided to a magnetic ink eharacter recognition (MICR) system for conversion to data 25 that is stored in a CPCS mass data storage file, or MDS (not shown). The pnnted characters are sometimes colle hveIy refe~r~d to as the MICR line, and ~he complete set of MICR-line data is sometimes called a check "image", as it contains most of the pe~en~ data on the check. The records in the CPCS MDS include ~elds for the : ~: : rou~ng/transit code for the payor bank (the bank on which the check is drawn), ~he 30 account number of the cus~omer who wrote the check, the serial number of the ~eck and its amount. ~ed on the routing/~ansit number on the check, the ~PCS directs the sor~er to pocket the check for the bank on which it is drawn.

24 2 1 ~ 3 3 5 3 Pcr/usg2/o5780 At various times throughout each business day, the CPCS generates a cash letter for each bank for which there are checks. The checks that are pocketed for each bank are then bundled with the respective cash letter. Collectively the checks and the letter are simply referred to as a cash letter 113. Assun~ing both banks 10lA and l0lB have 5 checks drawn on the other bank, banks 101A and l01B deliver cash letters 113A and 113B, respectively, to the other bank via a courier 114 service that physically transports the bundle to the respective bank.
Once the cash letter has been produced, the ECP system at each bank prepares, using the same MICR-line data stored in the CPCS MDS data file, electronic cash l0 letters for each "paper" cash letter 113A and 113B that is sent. This electronic cash letter is then sent to the respective banks, using standard communication techniques over one or more electronic or optical data transmission networks ll5.
Once received, ~the dectronic cash letters are processed the same day by the receiving bank's ECP system~ l05 and CPCS 107. Genelally, this involves having the 15 ECP systems first~p3fonn er~ain p~ocessing functions, then presenting this d~mnic cash letter coolaining tho MICR infonnabon to the CPCS. The CPCS then "captures" the items or checks in the electronic cash letter as if they were physical paper items, and sends some or all of these items to the bank's posting systems, such as Demand Deposits (D~DA),~ and etc.~ This called a "non-MICRH capture, as the 20 inforina~ is not being~;read by the CPCS from the magnetic ink characters on the paper checks, but from a nnon-MICRn filè crea~ed by the ECP.
The cou~i3s 114 usually~ d~eliv the paper cash letters 113A and 113B to the banks the next business~ Upon anhal, the paper checks are placed in the CPCS
;~ sort3s at the leceiving ~banks for~capture by the CPCS system 107. After capture, the 25 ECP system reoonciles the electronic and the paper cash letters with the MICR !line ~, ~;; data. The checks are then~handled in the usual manner by the banks.
The forgoing is a ~general desaiplion of the functioning of a basic ECCHO
exchange. Figures 2-8 illust~ dctails of the ECP system. Basically~ it has two major sub-systems: 1~ the Send System; and 2) the Receive System. An additional but 30 c:ritical component of the;ECP system is an on-line CIF system, that is common to both ~; the Send and the Recave subsystems, and will be first discussed without re~erence to a figure. In the pref~ embodiment, the ECP is implemented with a general puIpose :~ SUBSmUTE SHEET

WO 93/0~42~ ` PCI/U~s2/05780 2113~ ~S3 -8-digital computer whose operation is directed by a program such as the one disclosed in the microfiche appendix submitted herewith.
The On-Line CIF System The On-Line CIF System handles, among other things, on-line maintenance of S partner bank records, benefit sharing percentages, and edit rules. It also provides a complete data base file list and audit control reporting.
The majority of alI benefits derived from the ECP process acc~e to the bank receiving the electronic Cash Letter. ECCHO Rules permit each Receiving bank to negotiate benefit sharing ar~angements independently with each prospective exchange 10 -;partner, t~ provide an incentive to the partner for sending electronic Cash Letters to that bank. A key element of the system, then, is the centralized storage of each of these agreements within a single data base file.
Additional data stored in the CIF system include fields of a general nature thatidentify the name of the partner banks, the primary contacts at the par~er banks (for 15 both sending and receiving data) and the telephone number(s) for the primary contacts.
Data fields that are more specific are defined to include identification numbers for the parhler banks, such as routing/transit numbers, version numbers of the ECCHO record formats to be sent to;and received fr~m the parhler banks, send and receive cut-off times that define the target deadlines for the par~er banks, send alld receive volume 20 cut-offs that iden~fy the maximum number of items allowed for each banks trans~ssion, and send~and receive cash letter maximums that define the maximum number of cash letters allowed for transmlssion to and receipt from each parhler bank.
- The CIF system a:so includes 9elds that pertain to profit/benefit shanng for each of the partner b~ s. These fields store ~e benefit percentages to be applied to 25 the elec~onic cash letters that are sent ~to or received from the par~er banks for each day of the week. Finally, the CIF system inc}udes fields that are used to maintain information relating~ to the partner banlc's records such as the date and time associated with the last update of the records, as well as identificadon of the user responsible ~or ehe last update.
~0 The maintenance portion of the CIF System comprises modules for adding,updating and deleting parbner bank CIP records. The Add function allows an authorized user to input all partner banlc data as detailed in the section discussed above.

~VO 93io2424 ~113 j 3 ~ Pcr/us92/os78 The system contains logical edits that prevent a user from entering duplicate records (based on reeord type and bank-id fields). In addition, the system will not allow for sending data to, or receiving data from, partners with whom such exchanges have not been authorized in the CIE7. This is determined by the BCCHO record version number.
S To ease the entry of information into the Add screen, the CIF System automatical1y inserts the current date, time and operator id into each new record.
The Edit/Update portion of the CIF System prompts the user to enter the bank identification number for the requested record. The system then displays an editscreen, similar to the Add sc een, that contains the data for the requested bank. The 10 system allows an authorized user to modify all fields within the screen except the record type, bank-id and last update fields. In addidon, the Edit/Update portion of the CIF System provides the same logical edits and automatic entries that are available in ~eAdd portion.
The Delete/Undelete ponion of the CIF System allows an authorized user to 15 mark a bank record as deleted~as of a specified date. The Delete/Undelete portion prom~pts the user to enter~tho bank-id number for the requested record. It then displays a sc~, similar to the Add~screen, conlaining information for the particular bankrequested. The Ddete/Undele~e~ponion a11Ows the user to close the account by entering an account closed date~into~the system. If, at a later time, the user wishes 20 to re open~an account, he~can do so by enlering zeroes-in the account closed date field.
The CIF System also includes~audit repo~ ~features that detail the changes made to the CIF~ database, whe~ uugh Addsj Edits or Deletes. The System prompts the user to enter the~ sta~t date ~for the report, with the end date of the repor~
being the current system date.~ ~ The CIF system scans the CIF database and selects only 25 those resords that fall within the date range specified by the user. The system then formats and prints a list of ~aU data fie}ds along wit~h the corresponding changes to the data fields. In addition; to ~these features, the CIF System includes the ability to print out a detail listing of all partn~ bank rec~rds cu~ently on the CIP database.
Ihe Send System Referring now briefly to ~lGURES 2 and 3, the Send portion of the Electros~ic .
Cheek Presentment System automatically handles the selection and extraction of targeted cash letters from the CPCS system. The Send portion may be divided into ~ SUBSmUTE SHEET

WO 93/02424 Pcr~uS92/057~0 2 ~ 1 3 .3 5 3 -lo-two different segments that address the diverse requirements of the marketplace: a Basic Send segment, which is Cycle and String based, shown in Figure 2, and an Enhanced Send se~ment, which is Cash Letter and Kill Bundle-based, shown in Figure 3.
S Re~erring now to just ~G~RE 2, the Basic Send segment provides on-line eapability for initiating the creation, or re-creation, of an electronic cash lett~r file.
The cash letter file is, in essence, a sequential file suitable for transmission to partner banks. The Basic Send segment includes an extract module 201. The cash letter extract module 201 segment allows the user to select a specific destin~tion bank, called 1~ an end point, extract all items associated with tbis end p~int, and create an elec~ronic file of this data for conversion into a standard fo~nat. The user is first prompted to enter the speci~c cycle to be extracted from all cycles in t~e CPCS Mass Data Set 203.
The extract module utilizes the bank records, discussed in the CIF System above, to dynamically build and display a screen containing all the bank names on ~le. The user 15 can then select a p~cular bank or end point for extrac~on. The cash letter extract module then extracts all item records from the CPCS Mass Data Set that corre~pond to the selected end point and cycle reques~ed. UpOIl extrac~on, the module builds an intermediate ex~act file 209 that will be used by the ECCHO fonnat module 211.
After building the intermediate file, the extract module 2û1 formats and prints a paper 20 detail report of all extracted items, and wntes a summary record to an extract control file 207 containing ~e extracted end point and summary totals at the bundle level of all cash letters extracted for eIec~onic transmission. The extract control file provIdes data ~or end of ~e day re~or~ng, ~cluding an expected benelSts report.
The EC(~HO format~ng module 211 is automaticaLly started from the cash letter 25 extract module after the extract module bui}ds the intennediate file. The module !~ks at the bank ~ecords in the CIF System to dete~n~ine the proper ECC:HO re~rd version number currently in use by the ~ific end point bank for which the ex~action was done. It ~en builds an elec~onic cash letter file, tenned an ECCHO hansmit file 213.
The elect~on}c cash letter file in ECCHO format comp~ises check detail records, file, c~sh letter and ba~tch headers, and file, cash letter and batch trailers. The check ` detail records ~clude fidds fior the paying banks routing transit number, the payor's 4~4 PCr/US92/05780 21133~;3 account number, the amount of the check, the item sequence numbe~ assigned by the sending bank, and status fields that determine whether the sending bank anticipates beneft sbaring, and whether the che~k being ~ansmitted is for collection, ~eturn or return notice. The cheek detail record also includes fields for storing the de~ositor's 5 account number, the originating banks routing transit number, the date and time the cash letter was created, and the cash letter number.
A file header exists for each electronic cash letter file. The file header includes the ECCHO format version number for the receiving bank, the routing transit number of the presenting bank, the date and time the file was created, and the name of the 10 presenting bank. A file trailer also exists for each electronic cash letter file. This trailer includes the total dollar amount of all check records in the file, the total number of cash letters in the file, and the total dollar amount of all benefit sharing records in the file.
The electronic cash letter file also contains a cash le~ter header for each cash15 letter extracted. This header includes the routing transit numbers of both the origination bank and the destination bank, the da~e and time the cash letter was created, the date the electronic cash letter file was crea~cd, the cæh letter number, and ~e name of the ~id~abnc bank. A cash letter~trailer also exists for each cash letter in ~e file. This trailer includes some of the informaOon contained in ~e cash letter header, as well as 20 the total dollar amount of the cash letter.- ~
A third header in the electronic cash letter is ~e batch header. - A batch header exists for e~ch batch that was~;ex~acted from the CPCS Mass Data Set. The batch header includes the routing ~transit numbers of bo~ the origination and des~nation banks, the date t~le batch was processed, the bundle ID, the bundle number, and the 25 cycle number. A batch trailer rewrd is also created for each batch extracted in tiie electronic cash letter. The batch trailer includes the total number of all check records in the batch, the total dollar amount of all check records in ~e batch, and th~ total dollar amount of all benelSt sha~ing check records in the batch.
In addition to the cash l~tter extraa module, the Basic ænd segment of the Send 30 System also incllldes an ex~act re-run module (not shown). This module allows the user to re-create a file that has been previously extracted. Upon completing ~e extraction, this module compares the results of the extraction wi~ those of the previous .
SUBSTI~lJTF ~F~T

WO 93/02424 PCr/US9~/05780 2113~3 -12-extraction. If the module detects a change in the information obtained through the extraction, it will notify the user that a particular data file, or string, is missing and will identify the missing string narne, bundle number, bundle amount and item count.
The Basic send segment also contains an extract re-start module that allows the 5 user to re-start an extract job that failed due to a program or system problem. Upon execution by the user, the module cr~ates a completely new extract file for the ~equested end point.
In addition to the above modules, the Basic send segment includes a number of utilities that enhance the Send System. One of ~e utilities, end of day reporting 10 module 215, allows the user to request the printing of a summary level report of all electronic cash letters sent out for a specific day, along with a the corresponding expected benefits report 217. A second utility allows the user to delete an entire entry from a previous extract file.
Refemng now to FIGI~RE 3, the Enhanced Send segment of the Send portion 15 of the Electronic Check Presentment System extends the functionality of the Basic Send segment to include the capability of extra~cting at the cash letter bundle level and ensures that the paper cash Letter and the electronic cash letter are exact duplications of one another The enhanced send segment includes modules and files that are functionally similar to those of the basic send system: CIF file 205; CPCS Mass Data 20 Set file 203; extract control file 207; intermediate ex~act file 209; ECCHO formatter 211; and ECCHO transmit file 213. ~
An enhanced cash letter extract module 301 allows a user to select a specific bank and a specific cash ~letter bme, and ex~act all killed items for ~is cash letter The extract modlile func'dons similarly to the one in ~e basic send segment except that, 25 ~er the user has selected a bank to be e~tracted, the user is prompted ~o enter the ~sh let~er time which will identify the ldll bundles to be extracted The module will then read the CPCS kill bundle~file 303 to select records which match the requested cash letter time The selected records provide pointers into the CP(:S Mass Data Set Strings, which are used to extract all item records for the c~rresponding kill bundle.
30 The module then creates an intennediate ex~act file 209, which is processed through the ~3CCHO fonnatter 211 module as in the basic send segment WO g3/02~ 3 ~ 5 3 Pcr/US92/05780 -13- .

The enhanced send segment includes a utility that allows the user to generate an end of day beneffts summary report w~aich is a summary level report of all elec~onic cash letters sent out for a specific day along with the corresponding expected benefit amounts. This utility prompts the user to enter the requested cycle for the S report then extracts the data for the requested cycle and folmats the information f~r printing.
The Recei~e System Referring brielqy to FIGI~RES 4A-8, a Receive System verifies, processes, and monitors the receipt of electronic cash letters from partner banks. It handles the 10 automated entry of non-~ICR data into CPCS and t~e follow-up reconciliation of the electronically captured items to the actual physical paper items. The Receive System comprises five modules: an input file pr~processor; a CPCS non-MICE~ input processing module; a reconciliation module, an image match/directed f~e sort module;
and an end of day repo~ng module.
Referring now to ~ ~ 4A, tlle input pre-processor module is a batch process that is either manually st~, or aut~started from the transmission receive job. I~s function is to balance and pre~lit an incoming ECCHO transmit or electronic cash letter file 213 from other ~er ban~s.
Thepre-processor module40i reads ~epresenting banlcs ~ou~ing transitnumber 20 contained in the file header record of the electromc cash letter file and validates this number against the routing transit numbers contained in the receiving banks CIF file 205. I~e validation detcrmines whe~er ~e sending bank is a valid sending par~ne~, and whe~er a send agreement: betveen ~e two is currently in force. If the sending bank is validated in both of these respects9 the pre-proeessor continues to process the 25 elec~ronic cash letter file.
Upon rec~ip~ and valida~on of each elec~onic cash l~tter file, a rec~rd for eachfile is created in ~ ~eceive contrd file 403. l~e record comprises dat~ asso~iated Wit}l ~e elec~onic cash letter file such aLs the name of the file, the date and ~dme the file was created, the total number of en~ies in the file, and other information pertaining to file, 30 bundle and cash ~etter totals. This information is updated.as pre-processing of the elec~onic cash letter file continues.

.~1 IR~ U~T

WO 93/0~424 Pcr/US92/OS7~0 211~5.')3 -14-The electronic cash letter file is then checked for duplicates, at the file level, the cash letter level, and the bundle level by searching the records in the receive control file for matching creation dates and times, matching cash letter numbers and matching ldll bundle identification codes and kill bundle numbers. If any duplicate 5 cash letters e~ist, they are bypassed during processing.
Aft~r chec}~ng for duplication, the pr~-processor 401 balances the electronic cash letter file at the bundle level, the cash letter Ievel and the file level. For balancing at the bundle level, the total number of all check records in the batch a~e ba~anced against the check record count ex~acted from the batch trailer. The total 10 dollar arnounts of all check records and~ all benefit sharing check records in the batch 3re also balanced against the check record count extr~c~ed from the batch t~ailer.
The file is balanced at the eash letter level by compa~ing the total number of batch check records, the total do~lar amount of all check records, and the ~otal dollar amount of all benefit sharing records, ~that are extracted from the cash letter ~ailer wi~
15 those amsunts calcuiated by the pre-processor upon examination of the individual cheok images.
The pre-pr~cessor balances the electronic cash letter file a~ the file le~el by compa~ing the total dollar arnount of all cash letters and the total nurnber of cash letters in the file with the associated information contained in the fiIe trailer. The 20 pre-processor then-prints a balancing report that lists, by cash letter, all out of balance batches, cash letters and/or files.
~ he pre-processor will then reformat ~he incoming file into a CPCS MICR
format file termed a "MICR" file 405 to differPntiate from a MICR file that is created from capturing of paper checlcs. This non-MICR f;le includes fields that specify cycle 25 eodes, post/no-post codes and ~cket codes. It then prints a block building r~por~ ~at assists the data prep/blocl~ building clerk in assembling the physical paper batches in the proper order for subsequent capture of the pape~ items.
Referring now to ~IGI~RE 4, after pre-proeessing, the non-MICR input file 405 provided to the CPCS ~or a process tenned paper-less MICR capture. To perform ~his 30 p~ocess, a pree~is~ng CPCS system is modified so that it is "tricked" into thinl~ng that the items presented by electronic cash letter are paper items. The CPCS c~ptures WO g3/02424 Pcr/uS92/0578o -lS- 21~3~53 and processes electronic cash letters as if they were normal paper cash letters, and all captured electronic items are assigned a second item sequence number by the CPCS.
Illustrated are standard CPCS modules 407, each of which having processes well known in the art. Very briefly, the D~CNMICR modules 409 indudes all of the5 modules for interfacing with sorters for MICR capture and sorting. The OLRR SCI
module 411 "edits" or checks the MICR line data for each item provided by the D~NMICR modules for validity (e.g. the routing/transit number and account number).
Module 413 formats the MICR data for the item and assigns the item a pocket code for DDA or other posting system processing. This MICR data and the pocket code are 10 written to an "all-items" I-String Information file 417, which is a mass data storage ~MDS) file, in step 415. At merge step 419, the I-String Information file is converted to an M-String data file 421, by, in essence, stripping all control documents from the file. Tlle ~CPCS ~extract module 423 then extracts the data necessary for posting to DDA or other p:sting ~systems.
For working with the ECP system, only the DKNMICR module 409 of the CPCS is substantially modified. One modificalion allows a Station Control Block to be defined for an elec~ic~cash Ietter sorter. ~ The function indicates that an electronic cash letter sorter has been defi d~ so ;that the CPCS system can generate the necessary control blocks for the~ el~ctroriic~h~letter. Another modification adds references to 20 the el:ectronic cash letter e~tensions~for the stadon control block and the MICR control tabb. The CPCS program is also~ modified to look for a run started on an electronic cash letter so~er. Upon-detection, it~passos control to the new electronic cash letter alization module that~loads ~he;OLRR edits and retrieves a tra~er number from the receive con~oi file417. ;~When the ~Icaronic cash letter sorter run has been initia1ized, 25 ~ICR task processing continues as if processing a normal paper run.
-R ceive control~file~ 417 is updated with balance summaries of the items plocessed from the elG~cash letter du~ing the run by the DKNMICR modules 409 forcash letter balance control. ~
Upon con~p1e~on of the~non-MICR processing run, an ECP strip file 425 is 30 ~e~d by an ECP strip file pfocessing module 427. This module creates a flat file of the non-MICR input items in I-string sequence and DIIMAGE format. The strip file ~:
TITI ITF .~I~FFT

WO 93/02~2~ Pcr/U~92/057~0 2 ~L 13 .3 i ~ -16-creation module also creates a balance summary of the items entered in the ECP st~ip file 425 ~or error checl~ng against the summary in receive control file 417.
Referring now to ~IGURE 4C, on the next day (day 2), the ECP strip file must be updated with information about whether there were items excepted in ~he DDA the 5 night before and not posted, as weIl as ~e proper cycle informatisn for each item that was posted. To create an updated ECP strip file 429, a pocket update module 431 in the ~3CP system matc~es each item in the ECP s~ip ~lle 425 with correspon~iDg DDA
cycle for the item in DDA cycIe file 433 and with any exceptions for the item in DDA
excéptions file 435.
Referring now to ~IG~lRE 5, after the paper cash letter is received, it is sorted in a conventional manner, without modification, by the CPCS of the par~ner bank in what is termed the first paper sort. Paper items 501, the Ghecks, are unbundled and fed ~roughout the MICR capture and sort system 503. The capture of the paper cash letter produces a an MDS I-String file 505, which is ~en merged at ste~ 507 into an 15 MDS M-string file 509 that will be used as an input into a reconciliation sort module.
Captured items 511 are gathered, as they will be used in a second paper pass (see Figure 7). Items rejected 513 is the MICR capture are reentered manually into the I-String file 505. All captured paper items are assigned a third item sequence number by the C:PCS.
Refening now to ~IGIJRE 6, a~ter the first paper pass, the paper items are reconciled with the electronic items received the previous day by electrollically matching the two data files in the sort/match module 601. The sort/match module sorts through the ECP s~ip file 429 in order to match ECP s~p file with the MDS M-String file 509 and merge: the pocloet codes from the strip file into the M-string file to produce a MDS D-String f~e 605. It then produces a full report 602 in account number anditem sequence number s~uence, and addi~onally produces a missing item/free item repo~ 603. A missing/free report 603 details any missing pape~ items for which there was an elec~onic item, and any ex~a paper items for which ~he~e is not a corresponding elec~onic item.
lRefe~ g now to ~IGURE 7, the paper items ~01 are once again passed ~rough the CPCS system for pocke~ng the p~per items. A directed fLne sort module701 matches the image ~f the elec~onic item in the D-S~ing file 605 ~ith the actual WO 93/02424 ; , 2 ~ 1 3 3 ~ 3 paper item as it is re-read by tbe electronic sorter, and directs the paper item to the appropriate pocket as dictated by the pocket code in the D-String file 605, and is further desc~ibed below. The directed fine sort module assumes that a pocket code is present for each item in t~he electronic cash letter D-string. Thus, only paper items for S which the corresponding electronic cash letter images have completed DDA processing are able to be directed to a pocket by the directed fine sort; all other unmatched items are considered free, or extra items and are dire ted to an unmatched pocket.
Additionally, to facilitate matching of the paper items to the electronic items, the D-String file 605 is utilized, since these records are in the same physical sequence as the 10 actual paper items from the f~rst paper pass.
The updated D-string file (containing the new pocket codes) directs tbe fine sort module, which in turn directs the sorter (not shown), to place matched paper items 703 to a pocket. The matched posted items are pocketed by statement cycle, the matched exception items are pocketed by excepdon code, the physical rejected items are sent to a reject pocket, and the~ lmmatched (free) items are sent to an unmatched pocket.
All ~ejected items 705 are fully reprocessed until only the actual unmatched items remain. These items are then batched and re-captured on the electronic sorter along with all of the bank's o~er first time capture work. The matched items are transferred to bulk file vaults or excep~don processing as appropriate.
l~e directed fine sort module expects that the D-String file 605 be in the same physical sequence as the papa items after the first paper pass. If the paper items are accidently dropped, or otherwise become out of sequence between the first and the directed finè sort/second paper pass, an optional third paper pass is then provided to read the paper items in ~eir current order, to re^order the D-String file 605 to match ~e new paper sequence, and then p~rform the directed fine sort.
Referring now to ~IGURE 8, an end~f-day settlement module 801 reads ~e ECP rfflive control file 417 and pr~duces an end of day or week or month settlement report 803 by bank, for all electronic cash Ietters received and processed through the electronic check presentment system. Additionally, an item sequence cross reference report is produced, lis~ng the three item sequence numbers associated with each item:
the Sending Bank ISN, the Electronic ISN, and the paper ISN. Optionally, an item TI ITF ~SH~FT

Claims

What is claimed is:

1. A check presentment system for use by a bank within an organization of banks to improve clearing of checks presented between partner banks within the organization, the system comprising:
means for capturing check information from paper checks collected by a presenting bank and storing the information in a first database;
customer information file means for maintaining in a central file records on each partner bank participating in an electronic check clearing organization, the records including fields for storing an endpoint identification, and parameters relating to electronic check clearing;
data processing means responsive to the customer information file means, the data processing means extracting from the first database check information for check items to be presented to a selected partner bank in response to an endpoint identification of the selected partner bank and forming an electronic cash letter data file means, including check information, summary balances and information for identifying the particular cash letter; and electronic means for transmitting the electronic cash letter to a partner bank for presentment of check items by means of the check information in the electronic cash letter.

2. The check presentment system of Claim 1 further comprising:
electronic means for receiving an electronic cash letter transmitted from a partner bank;
data processing means responsive to the customer information file means for validating the partner bank, the data preprocessing means further balancing the electronic cash letter and formatting the electronic cash letter for providing check information to the means for capturing check information; and data processing means for reconciling check information received from the partner bank in the electronic cash letter against check information received in a paper cash letter sent by the partner bank that corresponds to the electronic cash letter

3. The check presentment system of Claim 2 further comprising data processing means for controlling and maintaining records related to the transfer and receipt of the electronic cash letters.

4. A check presentment system for use by a bank within an organization of banks to improve clearing of checks presented between partner banks within the organization while utilizing preexisting check processing systems, the system comprising:
a check processing and capture system (CPCS), the CPCS including:
means for magnetic ink character recognition (MICR) for capturing check information from paper checks deposited by customers and received from a partner bank;
data processing means for processing check information, the CPCS being modified to receive electronic check information; and mass data storage file means in which the captured check information is stored;
data processing means for electronic check presentment, the data processing means including:
file means for maintaining records on partner banks, the records including data identifying partner banks and parameters for electronic check presentment;
send module means for extracting from the CPCS mass data storage file check information for transmission to a partner bank using identifying parameters from the file means, the send module formatting extracted check information according to a predefined format to form an electronic cash letter; and receive module means for preprocessing an electronic cash letter received from a presenting bank in order to provide for validation and balancing of the electronic cash letter, the receive module means providing the check information in the electronic cash letter to the CPCS
for processing; and electronic communication means, coupled to the data processing means for sending to and receiving from partner banks electronic cash letters.

5. The check presentment system of Claim 4 wherein the send module means further provides for generating expected benefits report.

6. The check presentment system of Claim 4 wherein the receive module means further reconciles an electronic cash letter received from a presenting bank with a corresponding paper cash letter received from the presenting bank.

7. The check presentment system of Claim 4 wherein the module means further generates an item sequence number cross reference file for cross referencing a first item sequence number assigned to each electronic check item when an electronic cash letter is captured by the CPCS with a second item sequence number assigned to a corresponding paper check item during subsequent capturing of the paper cash letter.

8. An electronic check presentment system for managing, sending and receiving check information in the form of cash letters to and from banking systems.
the system comprising:
means for selecting check information for extraction from a designated database containing said check information wherein the selection criteria comprises a specific bank or endpoint and a cash letter time;
means responsive to said selecting means for extracting said selected check information in the form of electronic cash letters;
means for transmitting and receiving said electronic cash letters to and from other computer databases handling such check information;
means for reconciling the transmitted electronic cash letters against captured paper cash letters, wherein the reconciliation is accomplished by comparing the electronic cash letters against captured paper cash letters to determine discrepan-cies, and reporting any discrepancies to the electronic check presentment system; and means for controlling and maintaining records related to the transfer and receipt of said electronic cash letters such information comprising routing transit numbers of the banks utilizing the electronic check presentment system, and dates and times related to specific transfers of electronic cash letters.

9. The electronic check presentment system of Claim 8 further comprising:
means for reporting summary information relates to the transfer of electronic cash letters, such information comprising the number of checks contained in specific bundles, the total dollar amounts associated with specific cash letters and bundles, the total dollar amounts associated with the transfer of electronic cash letters to and from specific end points, and the dates and times associated with the transfers of specific electronic cash letters.

10. A method for managing, sending and receiving check information in the form of electronic cash letters to and from banking systems, the method comprising the steps of:
capturing paper cash letters in electronic cash letter form and storing them in a computer database;
selecting specific banks or endpoints that are to receive electronic cash letters, the selected banks or endpoints being provided by an on-line computer database that provides information on banks utilizing this method such as the names, addresses phone numbers, routing transit numbers and contacts associated with selected banks;
extracting from said database those cash letters associated with said selected banks;
transmitting to said selected banks the extracted cash letters;
receiving electronic cash letters from transmitting banks and storing them in a computer database; and reconciling said electronic cash letters against captured paper cash letters.

11. The method for managing, sending and receiving check information in the form of electronic cash letters of Claim 10 including the additional step ofreformatting the extracted cash letters into a standard format prior to transmission to the selected banks.

12. The method for managing sending and receiving check information in the form of electronic cash letters of Claim 10 wherein the step of reconciling the electronic cash letters against captured paper cash letters is accomplished by comparing the electronic cash letters against captured paper cash letters to determine discrepan-cies, and reporting said discrepancies to a computer system responsible for saidreconciliation.

13. A method for use by a bank in an organization of banks to reduce the time for payment on checks collected by it and presented to a bank within the organization for payment, the method comprising the steps of:
maintaining an information file for partner banks in an organization of banks, the information file on partner banks including maintaining data identifying the banks and benefit sharing parameters;
capturing check information from paper checks collected at the bank and storing the check information in a first database as check records;
selecting an endpoint bank from the information file;
extracting from the first database check records for the selected bank;
formatting according to predetermined format the extracted check records into an electronic cash letter for transmission to the selected bank.

14. The method of Claim 13 wherein the step of maintaining an information file further includes the step of maintaining data on communications parameters.

15. The method of Claim 13 wherein the step of selecting includes the step of building from the information file end-points from which to select killed bundles for extraction.

16. A method for use by a bank in an organization of banks to reduce the time for payment on checks collected by it and presented to a bank within the organiza-tion for payment, the method comprising the steps of:
maintaining an information file for partner banks in an organization of banks;
capturing check information from paper checks collected at the bank and storing the check information in a first database as check records;
selecting an endpoint bank from the information file;
extracting from the first database check records for the selected bank;

formatting the extracted check records into an electronic cash letter for transmission to the selected bank;
wherein the step of selecting includes the step of selecting from the information file a bank; and wherein the step of extracting further includes reading from a second database storing kill bundle information with which to extract check records from the first database for transmission to endpoints automatically selected from the information file.

17. The method of Claim 13 wherein the step of formatting includes formatting the records according to a predetermined format.

18. The method of claim 17 wherein the step of formatting further includes the step of determining which check records are available for benefit sharing.

19. The method of Claim 13 further including the step of generating a settlement report, including expected benefit sharing.

20. A method of processing an electronic cash letter received from a bank for expedited clearing of checks, the method comprising the steps of:
receiving an electronic cash letter file from a sending bank containing check records;
preprocessing the electronic cash letter file, the step of preprocessing including the steps of validating the electronic cash letter, checking for duplicate check items balancing dollar amounts, and formatting for conforming to check processing and capture system (CPCS);
capturing the electronic check records with a CPCS;
posting the check records to a demand deposit accounting system:
capturing check information from paper checks in a subsequently received paper cash letter corresponding to the electronic cash letter; and reconciling the check records in the electronic cash letter with ???
captured check information and sorting the paper checks according to DDA cyc??, assigned during the capturing of the electronic check records.

21. The method of Claim 20 further comprising the steps of:
assigning item sequence numbers during the capturing of the electronic check records and the capturing of the paper checks; and creating a cross reference file of the item sequence numbers for each check item.

22. The check presentment system of Claim 1 wherein the data processing means forms the electronic cash letter with a field that indicates whether the check item is eligible for return if the check item is subsequently determined to be unpaid.

23. The check presentment system of Claim 1 wherein the data processing means forms the electronic cash letter with a control record that indicates whether a check item is a returned check item.

24. The check presentment system of Claim 1 wherein the data processing means extracts killed items from a plurality of kill bundles; and wherein the electronic cash letter further includes a summary information for each kill bundle.

25. The check presentment system of Claim 1 wherein the records on each partner bank include field for dates and time information relating to presentment of electronic cash letters between the presenting bank and each partner bank.

26. A check presentment system for use by a bank within an organization of banks to improve clearing of checks presented between partner banks within the organization, the system comprising:
means for capturing check information from paper checks collected by a presenting bank and storing the information in a first database;
customer information file means for maintaining records identifying partner banks participating in an electronic check clearing organization and parameters relating to electronic check clearing;
data processing means responsive to the customer information file means, the data processing means extracting from the first database check information for check items to be presented to a selected partner bank and forming an electronic cash letter data file means, including check information and summary balances; the data processing means generating expected benefit reporting; and electronic means for transmitting the electronic cash letter to a partner bank for presentment of check items by means of the check information in the electronic cash letter.

27. A method on a data processing system for use by a bank in an organization of banks to reduce the time for payment on checks collected by it and presented to a bank within the organization for payment, the method comprising the steps of:
extracting bank item records from a first database storing item information captured from paper items collected at the bank to be presented to aselected endpoint;
maintaining a file on the date processing system on item records extracted; and formatting the extracted item records into an electronic cash letter file for transmission to the selected endpoint, the electronic cash letter including item records and; summary information on the item records.

28. The method of Claim 27 wherein the step of maintaining a file on item records extracted includes storing sequence numbers for items extracted.

29. The method of Claim 27 wherein the step of extracting includes extracting a plurality of kill bundles and wherein the step of formatting includes placing kill bundle control records in the electronic cash letter file.

30. The method of Claim 27 further comprising the step of maintaining an information file on partner banks.

31. The; method of Claim 27 wherein the step of formatting includes associating data fields with item records In the electronic cash letter indicating whether the item record is eligible for return.

32. The method of Claim 27 further comprising the step of maintaining an information file on banks within the organization of banks, the information including parameters relating to transmission of electronic cash letters to each bank.

33. A method on a data processing system for use by a bank in an organization of banks to reduce the time for payment on checks collected by it and presented to a bank within the organization for payment, the method comprising the steps of:
receiving an electronic cash letter file from a sending bank containing electronic check records;
maintaining an electronic control file containing information on check records received in the electronic cash letter and subsequent processing of the check records;
communicating the electronic check records in the electronic cash letter file to a posting system;
passing the paper checks subsequently received within a paper cash letter corresponding to the electronic check records within an electronic cash letter through a check capture system and capturing paper check records and placing them in an electronic file; and reconciling by comparing the check records in the electronic cash letter file with the paper check records captured from paper checks, placed in the electronic file.

34. The method of Claim 33 wherein the step of reconciling includes the steps of:
updating with a data processing system electronic check records received in the electronic cash letter with posting information;
comparing with a data processing system the electronic check records with the paper check records placed in the electronic file;
updating with a data processing system matched check records with posting information and ordering matched or unmatched check record files in an order in which the paper checks were captured; and passing the paper checks through a sorter in the same order of the original passing of the paper checks through the check capture system and sorting the paper checks into pockets according to the posting information associated with the matched check records.

35. The method according to Claim 34 wherein the step of sorting further includes the step of sorting checks into separate pockets according to whether the checks are identified as matched or unmatched.

36. The method of Claim 33 further comprising the step of preprocessing the electronic cash letter file, the step of preprocessing including the steps of validating the check items within the electronic cash letter for posting and checking for duplicate cash letters.

37. The method of Claim 33 wherein the step of preprocessing further includes balancing the electronic cash letter.

38. The method of Claim 33 wherein the step of communicating the electronic check records to a posting system includes capturing electronic check records with a paperless input to a check capture system prior to posting.

39. A method on a data process system for use by a bank in an organization of banks to reduce the time for payment on checks collected by it and presented to a bank within the organization for payment, the method comprising the steps of:
selecting an endpoint for presentment of items for payment;
extracting check records to be presented to the selected endpoint from a first database storing item information captured from paper items collected at the bank;
maintaining a file on the check records extracted;
formatting the extracted check records into an electronic cash letter of electronic check records for transmission to the selected endpoint;

receiving an electronic cash letter file from a sending bank containing electronic check records;
posting electronic check records in the electronic cash letter file;
reconciling with the data processing system the check records in the electronic cash letter file with check information captured from paper checks in a subsequently received paper cash letter corresponding to the electronic cash letter; and maintaining a control file means on the data processing system responsive to the steps of extracting check records and receiving electronic cash letters, the control file means keeping track of check records sent and received.

40. A method of reconciling an electronic cash letter that has been posted with a subsequently received paper cash letter comprising the steps of:
updating with a data processing system electronic check records received in the electronic cash letter with posting information;
passing a paper cash letter through a check capture system and capturing check records;
matching with a data processing system the electronic check records with the paper check records;
updating with a data processing system matched check records with posting information and ordering matched and unmatched check record files in an order in which the paper checks were captured; and passing the paper checks through a sorter in the order they first passed through the check capture system and sorting paper checks into pockets accordingto the posting information associated with the matched check records.

41. A check presentment system for use by a bank within an organization of banks to improve clearing of checks presented between partner banks within the organization, the system comprising:
electronic means for receiving an electronic cash letter transmitted from a partner bank;
data preprocessing means for validating the partner bank, the data preprocessing means further balancing the electronic cash letter and formatting the electronic cash letter for providing check information to a means for capturing check information; and data processing means for reconciling check information received from the partner bank in the electronic cash letter against check information received in a paper cash letter sent by the partner bank that corresponds to the electronic cash letter.

42. The check presentment system of Claim 41 further comprising data processing means for controlling and maintaining records related to the receipt of the electronic cash letters.

43. The check presentment system of Claim 41 wherein the system further includes a means for capturing check information, the means for capturing check information receiving a paper cash letter and capturing check records; wherein the data processing means for reconciling updates electronic check records received in the electronic cash letter with posting information, matches the electronic check records with the paper check records, updates matched check records with posting information and orders matched and unmatched check record files in an order in which the paper checks were captured; and wherein the system further includes a sorter for receiving the paper checks through a sorter in the order they first passed through the means for capturing checks and for sorting the paper checks into pockets according to the posting information associated with the matched check records.

44. A method on a data processing system for use by a bank to reduce the time for payment on checks collected by it and presented to a partner bank for payment, the method comprising the steps of:
maintaining a central information file on a data processing system, the central information file containing information particular to each partner bank with whom the bank engages in presenting checks electronically, the information including routing and transit numbers of each bank and formats of electronic cash letters preferred by the partner bank;
extracting with the data processing system, in response to a routing and transit number of a selected bank, bank item records from a database storing item records captured from paper items collected at the bank to be presented to the selected bank; and formatting with the data processing system, in response to the information on formatting, the extracted item records into an electronic cash letter file for transmission to the selected bank in an electronic cash letter format preferred by the selected bank, the electronic cash letter including item records and summaryinformation on the item records.

45. The method of Claim 44 wherein the central information file includes information on any deadlines for presenting electronic cash letters to each partner bank and wherein the data processing system prompts extracting of bank item records for a partner bank in response to deadlines for that partner bank.