MAJOR BANKING-COMPUTER CONSORTIUM TO DEVELOP ELECTRONIC CHECK FSTC Promises Early Demonstration Using the Internet Media contacts: Mayer Resnick (201) 836-2968, FSTC, Ed Russell (617) 434-6883, Bank of Boston, FSTC URL: http://www.llnl.gov/fstc New York (Aug. XX, 1995) -- The Financial Services Technology Consortium (FSTC) today announced the formation of a multi-industry team to design and implement an lectronic check for use over the Internet by consumers and businesses. FSTC is a consortium whose goal is to utilize emerging technologies to enhance the competitiveness of the financial services industry. The FSTC Electronic Check, which will work within the existing banking infrastructure, brings the benefits of paper checks to electronic commerce, while permitting the increased efficiency and timeliness of doing business on the "net." FSTC expects to demonstrate the Electronic Check within the next two months. "This project is particularly significant because it represents the first collaborative effort by major banks and their industry partners to develop from inception a new financial standard," said Dan Schutzer, FSTC president and Citibank vice president and director of advanced technology. "FSTC's Electronic Check is designed to be open, secure and convenient. It will bring to electronic commerce on the Internet a level of security and confidence currently found only in traditional banking products," Schutzer added. Bank members of the FSTC Electronic Check program are: Bank of America, Bank of Boston, Bank of Montreal, Bank One, Chemical Bank, Citibank, and Wells Fargo Bank. Industry members are: BBN Inc. (Bolt Beranek & Newman), Equifax, IBM Corporation, Information Resources Engineering Inc., National Semiconductor, Sun Microsystems and Telequip. Research and consulting organizations are: Bellcore, Oak Ridge and Sandia National Laboratories, and the University of Southern California-Information Sciences Institute. Advisory members are: Electronic Check Clearing House Organization (ECCHO) and National Automated Clearing House Association (NACHA). Appointed as the FSTC Electronic Check project director is John Doggett, director of applied technology, and as project manager is Frank Jaffe, senior systems consultant, both from Bank of Boston. "As shown by the over 60 billion checks written annually, paper checks are the payment mechanism of choice. We expect the FSTC Electronic Check and its smart-card or PC-card checkbook to become the preferred method for making and receiving payments due to its cost-effectiveness and embedded safety features," Doggett said. "The vision of a bank in your pocket, a bank at your desk, a bank where your are, can now be achieved with the FSTC electronic check," Doggett added. Formed in September 1993, FSTC is a consortium of some 65 organizations comprising banks, financial services firms, industry partners, national laboratories, universities, and government agencies. FSTC sponsors collaborative research and development on technical projects affecting the entire financial services industry and its users with particular emphasis on projects involving electronic commerce. FSTC development projects include interbank check image exchange, electronic commerce, and fraud detection and management. Editor's note: Attached is a brief description of how the FSTC Electronic Check works. A Brief Description of How FSTC Electronic Check Works The FSTC Electronic Check will provide an enhanced all-electronic replacement to the current paper check, and will be useable over any network. Paper checks and checkbooks will be replaced by electronic checkbooks, handwritten signatures will be replaced by digital signatures and the delivery by the postal service by the Internet or other electronic highway. These changes will greatly increase the convenience and security of check writing since the entire process will be automated and integrated into existing applications. By using "smart cards" and PC cards as electronic checkbooks the FSTC Electronic Check will be almost impossible to forge. Unlike paper checks, the person accepting an FSTC Electronic Check for payment will be able to verify that it has not been altered. As with paper checks, electronic checks will be an open payment instrument, providing for third-party services and a variety of payment options, such as travelers', cashiers' and certified checks. FSTC Electronic Checks also integrate into existing interbank clearing networks such as the Federal Reserve System and various automated clearing houses. FSTC's unique approach to the Electronic Check results in a secure, self-authenticating payment instrument that bridges the barrier between the insecure public network and the trusted financial clearing systems. # # # For further information on how FSTC and how FSTC Electronic Check works, please contact: Mayer Resnick (201) 836-2968, FSTC, or Ed Russell (617) 434-6883, Bank of Boston. # # #