Processing checks electronically has reduced carbon emissions by billions of pounds since the 2004 implementation of the Check Clearing for the 21st Century Act, according to research published by Digital Check Corp. That law, also known as the Check 21 Act, made it legal for banks to settle check payments electronically, rather than exchanging the original paper documents. By moving the clearing process online, the industry has saved billions of dollars and made a profoundly positive impact on the environment.
Prior to the Check 21 Act, each check written in the United States had to be physically returned to the originating bank in order to legally complete the transaction. The industry employed a fleet of more than 100 private aircraft for that purpose to ensure the next-day processing of payments. Once that system was no longer needed, the savings – both financial and environmental – began to materialize.
“The Check 21 Act effectively replaced jet engines with desktop scanners in the payment process, which was a transformative event for the banking industry,” says Alex Trombetta, Digital Check’s vice president of product management and marketing. “As we approach the 20th anniversary of that legislation, we, as manufacturers of those scanners, thought it would be interesting to attempt to quantify the environmental impact of that change. Needless to say, the results far surpassed our expectations.”
Some of the findings released by Digital Check include:
- More than 1 million small aircraft flights, totaling at least 1.5 billion miles, have been eliminated since 2004;
- At least 25 million gallons of jet fuel per year have been saved as a result; and
- Between 5,000 and 20,000 gallons of diesel fuel per day have been saved by way of reduced armored car deliveries.
While the figures are striking, Trombetta says the report should not be interpreted as a criticism of the previous system but, rather, an affirmation of its replacement.
“It’s tempting to use this type of information to pass judgment about how inefficient the old system must have been. However, we can all remember that, up until about the turn of the century, there just wasn’t a very good alternative for exchanging these paper checks if you wanted to clear them within a few days,” he says. “The banks would have switched to an electronic clearing process sooner for the cost savings alone, but 20 years ago, both the technology and the regulatory environment stood in the way of that. The message we can take away from this is the power of modernization to do tremendous good.”
