What is ECCS?
The Electronic Check Clearing System (ECCS) was introduced in 1999 to address the requirement of the Bangko Sentral ng Pilipinas (BSP) to determine the clearing results before 5:00 PM every banking day. It was a turning point as the new system provides an online communication linkage between the clearing participant banks and the PCHC. The transmission of electronic check data by the bank branches to the PCHC ECCS Host Computer for netting purposes enables expeditious generations of clearing results even before the physical checks arrive at PCHC, allowing for new clearing concepts and procedures that directly address possible settlement risks.
How does it work?
When payment is made in the form of a check, the payee may either present it over the counter for encashment to a drawee bank/branch or deposit the same to his/her bank. a. Checks paid out (encashed) over the counter by drawee banks will not pass through PCHC; however, if unfunded upon over-the-counter presentation, payee may be advised to deposit the “On Us Check” pending funding that may be coming from other source i.e. fund transfer – cut-off of which is usually at 10 PM of same day. b. A check deposited by a payee to his/her bank account will go through the clearing process using the PCHC facility. 1. Checks deposited by the client to a bank which is not the drawee of the check will be presented by the depository bank to the drawee bank via PCHC as an “Outward Item.” 2. Banks deliver their outward checks for clearing to PCHC for processing and routing. PCHC will then read the MICR code lines, capture the images of these checks and then sort each by bank. 3. PCHC will reconcile unbalanced batches in order to prove the accuracy of clearing work from the banks. 4. The checks are further sorted down to the branch-level account and check number sequences. 5. The fine-sorted checks will then be sent to their drawee banks as “Inward Items” for verification (of authenticity) and proper disposition (“pay” or “not pay”). 6. Reports and inward clearing data files derived from the ECCS processing are matched with the information derived from the sorted physical items which are made available for dispatch to the banks in the evening of the same clearing day.
PCHC will be migrating soon to an advanced clearing system using the concept of check truncation, where images and the payment information of the check are electronically captured and transmitted to the drawee bank via PCHC while the paper check “truncated” at the branch of deposit, thus eliminating the need to physically present the paper check to the Paying/Drawee Bank.