Regional Check Processing Center (RCPC)
What Is a Regional Check Processing Center (RCPC)?
A regional check processing center (RCPC) is a nearby Federal Reserve facility where checks that are drawn on depository institutions are handled overnight. A regional check processing center behaviors check-clearing operations including paper and electronic, and interbank check clearing.
A depository institution is a financial institution, for example, a [savings bank](/common savings-bank), credit union, commercial bank, or savings and loans where the public puts aside installments. Due to the rising dependence on electronic check processing, the Federal Reserve Bank fundamentally processes electronic forms of payment through credit cards, debit cards, and online account transfers versus paper checks.
Understanding Regional Check Processing Centers
The Federal Reserve persistently refreshes its check processing systems and rebuilds its timetables to satisfy the need of check processing and make it more efficient as per mechanical headways. As per the Fed, the number of checks written in the United States has been declining since the mid-1990s as electronic processing of checks is expanding.
How a RCPC Works
The Federal Reserve Banks give check assortment services to depository institutions. At the point when a depository institution gets deposits of checks drawn on different institutions, it might send the checks for assortment to those institutions straightforwardly, deliver them to the institutions through a neighborhood clearinghouse exchange, or utilize the check-assortment services of a correspondent institution or a Federal Reserve Bank.
For checks collected through the Federal Reserve Banks, the accounts of the gathering institutions are credited for the value of the checks kept for assortment and the accounts of the paying banks are debited for the value of checks introduced for payment. Most checks are collected and settled inside one business day.
Check Clearing Volume
The number of physical checks written nationally has been declining since the mid-1990s as the utilization of electronic payments instruments has developed. Also, the Check Clearing for the 21st Century Act (Check 21) eliminated barriers to the electronic assortment of checks and electronic check assortment has now turned into the primary method for gathering checks. Without a doubt, practically all checks handled by the Reserve Banks today are kept and introduced utilizing the Reserve Banks' electronic check assortment services.
These changes have empowered the Reserve Banks to reduce their national check-processing infrastructure so that, since mid 2010, they have been processing paper checks at one location cross country, down from 45 out of 2003.
Practically every one of the checks the Federal Reserve Banks process for assortment are presently received as electronic check pictures. From 1989 to 2008, the volume of checks diminished by half, from around 18 billion to just north of 9 billion. From that point forward, that number has kept on dropping, arriving at a low of just 3.77 billion checks cleared in 2020.
While the number of checks written has declined, it is likewise fascinating to note that the average value of checks cleared has ascended simultaneously. During the 1990s. the average value of a check written was around $725. During the 2010s, it had dramatically increased to an average of around $1,500 per check. In the year 2020, the average check was worth almost $2,100. This shows that individuals are utilizing electronic payments or credit cards for more modest purchases and holding checks for bigger totals.
Features
- Regional check processing centers (RCPCs) are check processing facilities situated all through the United States.
- RCPCs are run by the Federal Reserve, America's central bank, which is additionally responsible for check clearing and payments infrastructure.
- After some time, the number of physical checks written and handled has diminished substantially with the appearance of electronic and online payments.
