Skip the Line With Remote Deposit Capture

Remote Deposit Capture gives businesses of all sizes the ability to deposit checks into their bank accounts without actually going to the bank. Checks are scanned into a computer and sent to the bank digitally. Banks then send images of the checks to other banks to collect the funds. It’s the same system we’ve had for decades, but now it’s digital. Best of all: no standing in line at the bank.

Terrorism and US Banking Laws: Check 21 Act

The practice of Remote Deposit Capture is a by product of the Check Clearing for the 21st Century Act of 2004, aka the Check 21 Act. After the attacks of 9/11, this law was enacted to keep the United States’ financial industries operational in the event of a an act or terrorism or natural disaster that disrupted the ability to physically transport traditional (paper) banking documents. One of the things the Check 21 Act did was make the digital image of a check a legal payment document, just like a paper check. Remote deposit banking is also the reason a checker at the grocery store can now scan in your check without you having to write it.

Before 2004, checks from different banks had to be physically exchanged before the money was credited to the depositor’s account. Now, instead of paper checks, banks send images to each other. This makes it possible for checks to be deposited and paid even in the event of a major catastrophic event. And bank customers use Remote Capture Deposit to send their deposits to the bank without taking time to go to the bank.

Using a special scanner, depositors capture the images remotely, from their own place of business. They then send these to the bank with the click of a mouse and some user friendly remote capture software. Once the deposit is entered into the system digitally, the physical checks are destroyed.

Pros and Cons of Remote Deposit Capture

Proponents of remote capture deposit claim that it saves time and money. Business owners sending deposits remotely don’t have to send someone to the bank. It cuts down on paperwork and mistakes, and expedites the discovery of bounded checks. Plus, the faster a business clears customers’ checks, the better the cash flow.

Wendy Williamson, Treasury Management Officer at Arvest Bank, says businesses are on board.

“They love it.  It really allows them not only to focus on business but to do a deposit in a matter of minutes on one system that was taking several minutes, and maybe even up to an hour a day.  I have customers of all sizes using Remote Deposit.”

The downside for consumers is that the Check 21 Act in effect eliminates the float time for checks. In the old system, people who wrote checks had at least a one- or two-day grace period between the time they wrote a check and the time it was actually presented to their bank for payment. Checks now behave like debit cards, which begs the question: who writes checks anymore anyway?

Remote Capture Deposit: Good for Bankers Too

Not only is remote capture deposit technology allowing the banking system to operate more efficiently, but banks are profiting in other ways too. The workload of tellers is decreased as more of their job tasks are shifted onto the customer. And whether they’re using a third party vendor, or developing remote capture software of their own, this is a service customers value so banks are charging for it.

“This really is all the talk right now in banking.  Banks all over the U.S. are seeing this product flurish and are really pushing this as a lead business product,” said Williamson.

How Remote Capture Works

Watch a quick demo of remote capture deposit in action:

Image Credit: striatic, Flickr

Video Credit: rustybrick, YouTube