Remote Deposit Capture Saves Gas

Posted by Mark Brousseau

An interesting article on remote deposit capture in yesterday's edition of The Charlotte Observer:

Remote deposit saves steps, gas
CHRISTINA REXRODE

In an era of online banking and cash-back at the grocery store, depositing a check is one of the few tasks that forces people to journey to the nearest bank or ATM.

Remote deposit -- or depositing a check online -- could change that.

Half the country's banks offer the service to business customers, touting its convenience. Now some smaller banks, looking for creative ways to distinguish themselves, are considering the same service for consumers.

Remote deposit lets customers scan a check, submit it to the bank online, then destroy it a few days later.

USAA Federal Savings Bank, a Texas-based bank that caters to the military, pioneered remote deposit for consumers when it launched Deposit@Home more than a year ago.

Kerri Herring, a teacher's assistant and part-time photographer in Kannapolis, said she and her husband use it at least a couple of times a month.

People often pay Herring by check for photography work.

"We're checkless most of the time," said Herring, 23, "but there are always going to be grandparents who send birthday money."

Herring hates driving to the bank just to deposit a check. "It wastes time," she said. "I hate standing in line."

Some financial institutions are starting to pick up on that vibe. Massachusetts-based EasCorp, which sells a remote deposit service called DeposZip, says seven credit unions in Massachusetts, New Hampshire, Indiana and Oklahoma now offer it to consumers, and another nine throughout the country plan to do the same.

Charlotte-based NewDominion Bank, which already offers remote deposit for businesses, says consumer remote deposit is "on the drawing board." BB&T Corp. in Winston-Salem also says it's considering it.

Other companies say they're spreading the remote deposit concept, minus the scanner. In February, the Charlotte Metro Credit Union started advertising HomeDeposit, which lets "highly qualified" customers deposit checks by submitting information from the check to the credit union's Web site, then mailing it in.

"They've all had three or four checks laying around for $10, $15," said Nathan Tothrow, the vice president of marketing. "And who wants to get in the car and drive to the bank for that?"
Mitek Systems, a San Diego company, is advertising software that lets consumers deposit checks by photographing them and emailing the image -- all via cell phone.

Biggest thing since ATMs
Charlotte-based Wachovia Corp. and Bank of America Corp. started offering remote deposit for big corporate clients in 2004.At Bank of America, product executive Bob Johnston says the response from businesses has been "phenomenal," especially for global companies who don't want to mail checks across the ocean to their different offices. "Ground courier to an airline, back to a ground courier -- you can imagine the length of time and cost to do that," Johnston said.

Among smaller companies, banks are betting that remote deposit will appeal to niches that still deal often with checks, like property managers or nonprofits.

Akil Boston, the community development coordinator for Charlotte's Second Harvest Food Bank, says that using Wachovia's corporate remote deposit has cut out his almost-daily trip to the bank. "Seven miles roundtrip," said Boston, 27. "When you look at gas prices nowadays, it's pretty economical."

Remote deposit benefits the banks, too. It can enable them to expand their reach, serving customers who don't live near a branch. It can cut down on foot traffic at the branches, which can save money on staffing. Ninety percent of a teller's work involves checks, according to Celent, a financial services research firm.

"There hasn't been a financial services technology that has received so much attention since the adoption of the ATM," said Christine Barry, research director with The Aite Group, a financial services research firm in Boston.

Consumer option unlikely soon
Remote deposit for consumers is in its early stages. A survey of 157 banks, released in March by Celent, found that one-fifth offer or are planning to offer it.

But Wachovia and Bank of America say they have no such plans. Some doubt whether most people would go to so much trouble to deposit a check.

"It would be easier to drop it in an ATM (or) the mail, or walk it into the branch during lunch hour," says Jim Bruene, editor of the Online Banking Report, a trade publication.

Banks usually charge business customers per month and per check for remote deposit, and compatible scanners can cost at least $300. To convince consumers to use remote deposit, Bruene and Barry say, banks will have to drop the fees and make it compatible with low-end scanners.

USAA, the EasCorp credit unions and the Charlotte Metro Credit Union charge no fees for their programs, and USAA and EasCorp say their programs work with most any scanner.