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Extra Value Checks – An Explanation of Remote Deposit Capture
Check 21, also known as the Check Clearing Act for the 21st Century, made it much easier for financial institutions to transport and process personal and business checks. In 2004, it became legal to use digital images in place of paper checks.
The basic ideas was to keep banks and credit unions in the U.S. operational in the event of a national catastrophe such as a terror attack or major natural disaster.
Remote deposit capture, or RDC is the process of depositing checks into a bank account without the need to actually bring the paper check to a bank.
While Check 21 and remote deposit have obvious advantages for financial institutions in terms of the time required for check processing, there are also a number of benefits for businesses – and now individuals can also take advantage.
The Way Remote Deposit Works:
Remote deposit makes it easy for your small business to deposit multiple checks without ever leaving your office or home. In most cases, you would scan the check to create a digital image.
Some banks may require you use a specific type of equipment called a MICR scanner. This machine has the ability to better read the magnetic ink used for routing and account numbers at the bottom of a check. But the number of financial institutions that allow companies to use a normal scanner is growing.
The biggest benefit of remote deposit is the fact that your company would not have to send someone on an errand to the bank to deposit your business checks. That can save time and money. This also decreases the likelihood of checks becoming lost, and it eliminates piles or paperwork. There is a much smaller chance for human error on your part and the bank’s when you use RDC.
Still Catching On
A study conducted in June of 2009 by the Independent Community Bankers of America revealed that 62 percent of U.S. financial institutions currently offer RDC to most small businesses. 78 percent of financial institutions that were not offering the technology planned to do so by the year 2011. It’s estimated that that the number of clients using remote deposit capture to process business and personal checks will be more than five million by the year 2012.
However, there is obviously a lot of room for growth. Celent, a consulting agency for financial institutions indicated in an August 2009 study that the majority of banks admitted the fact that less than 5% of their small business customers were actually using remote deposit capture.
There are also non-bank providers of RDC services. In 2010, Heartland Payment Services and Servant PC Resources introduced special remote deposit software specifically designed for churches. Churches clearly have to handle a high volume of checks on a weekly basis. The software offered additional benefits that gave extra value to remote deposit.
Notifications are sent to clients allowing them to keep an eye on every part of the check clearing process. Clients can also choose to have Heartland’s automated recovery program handle bad checks. The software also reviews deposits looking for poorly scanned checks eliminating the need for manual correction.
Financial experts believe that if more banks adopted policies like this, the number of RDC clients would grow much faster, even if business customers were charged a fee for the services.
Remote Deposit for Consumers
The convenience of remote deposit is now becoming available to consumers as well. A handful of banks, like Texas base USAA Bank, now allow their customers to use remote scanners in their homes for depositing checks.
Chase Bank now allows customers with an iPhone to make remote deposits with an application for mobile banking.
All you need to do is snap a photo of the back and front of your checks, enter the amount and send it to your branch. That means people don’t have to drive to the bank during the day to deposit personal checks – you can do it from your home office when you have the time.
It is likely that more banks, businesses and individuals will see the many benefits of remote deposit ensuring that personal and business checks will remain an efficient payment option.
Give your bank a call today and find out if remote deposit services are available for your company or visit Extra Value Checks that are lower than Bank prices
Article Source: Kasey Steinbrinck
About the Author
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