Figure 27.3 DirectSend Collection

1
Figure 27.3Direct-Send Collection
S.F. Bank
N.Y. Bank
Step 3
Step 2
Step 4
Step 2
Step 1
Step 4
S.F. Payor
N.Y. Payee
N.Y. Payor
S.F. Payee
Step 1
Step 1 Payees provide goods and services to
payors. Payors give checks to payees. Because
the process proceeds
simultaneously on checks in each city, it can
apply when a New York payor sends a check to
a San Francisco payee and also when a
San Francisco payor sends a check to a New York
payee. Step 2 Payees deposit checks (one in
San Francisco and one in New York). Their banks
credit their accounts. Step 3 Each bank
sends to the other the checks the first bank has
received that are drawn on the other.
Specifically, the San Francisco bank sends
to New York the checks that the San Francisco
bank has received that are drawn
on the New York bank the New York bank sends to
San Francisco the checks that
the New York bank has received that are drawn on
the San Francisco bank. Funds are transferred
to settle the difference in amount.
Step 4 Both banks remove funds from the
payors accounts the San Francisco bank from
its customers and the New York
bank from its customers.