Washington (Oct. 30, 2003) -- In a speech to a Federal Reserve conference on the future of payment systems, Fed Chairman Alan Greenspan said that he believes electronic images instead of paper checks will lead to important financial industry changes, and he strongly supports a new law allowing this to move forward.

President George W. Bush this week signed a check-clearing act that will go into effect October 2004. It has financial institutions and banks looking closely at developing new ways for consumers and businesses to make transactions.

Greenspan said it was important that the systems developed for this new era work well enough to foster public confidence and be resilient enough to withstand shocks.

"Overall, the number of electronic payments has increased almost five-fold in two decades and, this year or next, may well exceed the number of checks written," he said in a Reuter’s report.

The Fed said last week that it would raise fees for check processing services by almost 6 percent in 2004 to reflect declining check use.

-- WebCPA staff

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