Definition of Electronic Check Presentment (ECP)

Electronic check presentment (ECP) is a process that allows financial institutions to exchange digital images of checks instead of paper to increase the speed of the check-cashing process. The signing of the Check Clearing for the 21st Century Act by President Bush permitted the use of electronic check presentment. Electronic check presentment saves financial institutions the cost of sending checks and the storage of those checks, in addition to allowing the institutions to provide better customer service.

Understanding Electronic Check Presentment (ECP)

When a check is deposited into a payee's bank account or a check is cashed, the copy of the check is sent to the bank or financial institution that houses the account from which the funds were drawn. The bank that houses the payer's account applies the check against the payer's account and deducts funds from the account in the amount of the check. The electronic check presentment (ECP) system allows this to happen more quickly, as the checks no longer have to travel through the mail to reach the payer's financial institution. Electronic copies are sent and can theoretically be received and processed by the payer's institution the same day that the payee deposits or cashes the check.

Electronic check presentment (ECP) is a technological and administrative advancement that has benefited the financial industry and its customers. The main benefits of the electronic check presentment are faster check clearing and the potential to detect check fraud or insufficient funds at an earlier stage. Since security is a main concern with digital imagery, digital images of checks use strong digital signatures for authentication, allowing another step for security.