... charge a fee for their services. Such services include check collection, air transportation of checks to the Reserve Bank and delivery of checks to paying banks. Reserve Banks handle about 27 percent of U.S. checks. Correspondent banks are banks that have formed "partnerships" with other banks in order to exchange checks and payments directly, bypassing the Federal Reserve and its fee. Outside banks may go through a correspondent bank to exchange checks and payments with one of its partners. Correspondent banks may also form a clearinghouse corporation, in which members exchange checks and payments in bulk, instead of on a check-by-check basis, which can be pretty inefficient when each bank might receive thousands of checks in a day. The clearinghouse banks save up the checks drawn on other members and exchange them on a daily basis. The net payments for these checks are often settled through Fedwire, an electronic funds ...

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