What does the Check 21 Act allow regarding paper checks?

The Check 21 Act primarily facilitates the transition from paper checks to electronic processing by allowing banks to use digital images of checks instead of the original physical checks. This act enables financial institutions to convert paper checks into electronic images that can be stored and processed more efficiently. As a result, it streamlines the check collection process and enhances the speed and security of transactions. The act does not mandate that checks be processed solely in physical form, nor does it limit electronic banking methods. Instead, it supports the use of electronic images, which can be transmitted and cleared electronically, ultimately improving the efficiency of the payments system.