SIC 6099 Functions Related to Depository Banking, Not Elsewhere Classified

SIC 6099

This category includes establishments primarily engaged in performing functions related to depository banking, not elsewhere classified.

NAICS CODE(S)

522320

Financial Transactions Processing, Reserve, and Clearing House Activities

523130

Commodity Contracts Dealing

523991

Trust, Fiduciary, and Custody Activities

523999

Miscellaneous Financial Investment Activities

522390

Other Activities Related to Credit Intermediation

This industry comprises several types of functions related to depository banking including the transmittal of financial information between institutions and electronic payment services. Some of the primary functions that constitute this category are automated clearinghouses, check cashing agencies, check clearinghouse associations, deposit brokers, electronic funds transfer networks, escrow institutions other than real estate, fiduciary agencies other than real estate or trust, foreign currency exchanges, money order issuers, smart card issuers, representative offices of foreign banks, safe deposit companies, tax certificate sale and redemption agencies, and traveler's check issuers. Each of these functions is organized and operates differently.

In the mid-2000s, this diversity industry sector was being significantly affected by the increasing use of electronic means for payment, both in the commercial and consumer spheres. In December, 2004, the Federal Reserve announced that electronic payment volume exceeded paper check volume for the first time during 2003, when the number of paid checks totaled 36.7 billion and electronic payment transactions totaled 44.5 billion, compared to 41.9 billion processed checks and 30.6 billion electronic payments in 2000.

Automated Clearinghouses

An automated clearinghouse (ACH) processes and delivers electronic debit and credit payments among participating institutions, usually commercial and savings banks, savings and loan associations, and credit unions. The electronic debits include pre-authorized mortgage payments and insurance premiums that are deducted from a customer's account. The electronic credits include pre-authorized direct payment of paychecks and dividends that are added to a customer's account. The expanding use of debit cards, which increased by 23.5 percent between 2000 and 2003, was driving the consumer electronic payment sector. Over the same period, check transactions declined by 4.3 percent. Automated clearinghouses are similar to check clearinghouses, in that all of the obligations are sorted and payment instructions are recorded electronically.

There are typically five steps in an ACH transaction. First, the customer authorizes an electronic entry to their account. Second, the company introduces the electronic payment data through its bank. Third, the originating institution receives electronic payment data from the company. Fourth, the automated clearinghouse receives the electronic entry from the originating institution...

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