First enacted on October 8, 2004, the 21st Century Act (also known as the Check 21 law) allows banks to handle more checks electronically, eliminating much of the effort placed in transferring checks between banks physically. Check 21 is responsible for an interesting precedent that was rarely considered prior to its creation: the use of remote deposits.
Specifically, Check 21 allows for the creation of a “substitute check”, a high-quality representation of both sides of a check, which legally acts as the original. This method is far quicker and efficient than the exchange of physical checks. Clearly, because of the high importance of something that legally serves as monetary value, there was a need to quickly standardize the structure and exchange of check images. This task that was embarked upon by X9, an ANSI accredited standards developing organization devoted to the financial industry.
Even before the law was enacted, X9 had approved the Draft Standard for Trial Use for check images as DSTU X9.37–2003. After using this as the standard for all major check image exchanges for some time, ANSI X9.100-187–2008 was published, incorporating improvements based off practical industry knowledge.
However, while the concept of check images has remained relatively constant throughout the years since the 2008 publication, their usage has grown due to the advancement of computers and smart phones. Today, mobile accounts for 35 percent of all bank interactions. The latest revision of the standard, ANSI X9.100-187-2016 – Electronic Exchange of Check and Image Data, was published on August 19, 2016 and was created to meet the current needs of the industry.
ANSI X9.100-187-2016 serves to establish the basis for check image exchange for financial institutions in the United States, setting guidelines and limitations that are reflective of current industry practices, while remaining fluid enough to accommodate the needs of varying networks and institutions.
The standard sets the file sequences, record types, and field formats to be used for the electronic exchange of check MICR (magnetic ink character recognition) line, associated check processing data, and check images in the form of cash letters. The goal of this document is to facilitate the exchange of electronic check data for forward check presentment, IRD creation, customer deposit, return item notification, and returns processing through a shared structure.
ANSI X9.100-187-2016 makes use of hierarchical record types to structure a file in a manner similar to a physical cash letter. The specific file structure is thoroughly addressed in the comprehensive content of the primary document and its annexes.
Users of the ANSI X9.100-187-2016 standard should note that the document does not address operational, implementation, or settlement needs, which are important for its actual application. Despite this, the standard user will have to make choices for data and image compression, encryption, and transmission specifications. However, the informative annexes of the document do provide information that should be useful for such requirements.
Users of this document should also be aware that most financial exchanges utilize a “companion document” that defines the specific rules for exchange within a particular network. The companion document should reference the relevant version of this standard.
ANSI X9.100-187-2016 – Electronic Exchange of Check and Image Data is now available on the ANSI Webstore.