The Clearing House Payments Company L.L.C. has announced that the Boston Clearing House (BCH), the oldest independent check clearing house in the U.S., has become part of the company’s SVPCO-Check Services business in a further consolidation of the nation’s check processing infrastructure.
The Clearing House, which has been providing settlement services to BCH institutions under a processing contract, will absorb the clearing of more than 13 million checks a month with a daily value of $850 million for BCH banks, thrifts and credit unions in metropolitan Boston. BCH institutions will also have an opportunity to leverage SVPCO’s regional and national check clearing infrastructure, process online adjustments, share regional transportation services and operate under a single set of check rules and settlement procedures for the first time.
This latest consolidation is part of The Clearing House’s goal to reduce processing costs as check volume continues its long-term decline. With the merger of the Boston operations, The Clearing House now provides integrated daily check clearing and settlement services from coast to coast, including six of the ten largest cities in the U.S. The company’s clearing operations reach almost 50% of the U.S. population, second only to the Federal Reserve.
“The scale and geographic reach of The Clearing House’s check processing operations will benefit BCH members by maintaining the current cost structure, while increasing our overall efficiency,” said Frank Annetti, Director Transaction Services of Sovereign Bank. “This step is part of the natural evolution of the check processing business in an era of falling U.S. check volume.”
In the past two years, The Clearing House has absorbed the check processing operations of Western Payments Alliance (San Francisco & Los Angeles); The Chicago Clearing House Association; Connecticut Clearing House Corp.; Northeast Regional Check Exchange-Long Island, Liberty Clearing House Association, which served New Jersey and the Philadelphia region; and Upstate New York Clearing House serving Albany, Buffalo and Utica.
“The Clearing House’s strategic objective is to realize economies of scale by applying state-of-the art technology to paper checks, one of the world’s oldest mediums of exchange,” said Jeff Neubert, Chief Executive Officer of The Clearing House. “Merging the operations of the Boston Clearing House into The Clearing House is yet another opportunity to achieve that goal, while reducing costs and further standardizing the nation’s check processing business.”