Government E-Checks
Two banks and the Department of the Treasury have announced a new electronic check pilot program. The E-check trial, managed by Financial Services Technology Consortium (FSTC), is planned to launch at the end of the year.
BankBoston (BKB) will be the first commercial bank in the pilot and will deposit electronic checks into existing checking accounts and clear them electronically through the Federal Reserve. The trial will run for a year and plans to handle 1,000 electronic checks per day when fully operational. E-checks will be issued to defense contractors that have recurring business with the Defense Department and also have accounts with BankBoston. NationsBank plans to join the pilot next spring.
While it has been proven by projects such as CheckFree and Cyber Cash that e-checks are possible, there is still a level of conservatism. According to Frank Jaffe, BankBoston's project director for the E-check trial. "Some preliminary market research shows a high level of interest, but we want to do real-life tests to understand customer reaction.
