Coming soon: Depositing checks with your scanner.

We already do the majority of my banking electronically. From the direct depositing of my paycheck to online bill paying we’re already pretty wired, but every now and then we still have to stop by a branch location to deposit a paper check I’ve gotten from someone. Now word has it that I might be able to just use my scanner instead:

Soon you will be able to deposit checks by scanning them at home and sending them electronically to your bank. No need to visit a branch or even an ATM.

This is possible because of the Check Clearing for the 21st Century Act, passed in 2003, which allows banks to exchange electronic images of checks. Already about half of all checks are scanned by businesses or the banks they are deposited into and not shipped in bags back to the banks on which they were drawn.

Fiserv, the big transaction services company, has announced new software that will enable banks to let home users deposit checks by scanning them. It already has a similar service for small and medium businesses. USAA, the financial services company that serves the military, has offered deposits through scanners for two years, but the idea has not yet caught on.

The time is right for such a service, said Rodney Springhetti, a Fiserv vice president of business development. The technology has been debugged through several years of working with businesses, and meanwhile consumers increasingly have scanners at home, largely in the form of all-in-one printer units.

I didn’t know that USAA already supported scanning your checks and that gives a bit more weight to considering using them for our credit union, we already get our automobile insurance through USAA and had been talking about switching to their credit union offering. How is it that I can be a USAA member when I’ve never been in the armed forces? Turns out my wife is eligible because of her father having served in the military. Technically my biological father did as well, but seeing as he’s been dead for 35 years I doubt I’d still qualify through him.

The idea of being able to deposit a check using my scanner is very attractive indeed. I’m sure it would be of help to folks like my parents who are getting older and thus more limited in their mobility and who still use credit unions with branches over an hour away from where they currently live. Still I can see where concerns about fraud would be high with this method and the industry sees it as well:

Fraud, of course, is an issue. Where there are scanners, of course, there may be Photoshop. And a scanner can’t detect all the anti-fraud features now built into paper checks, such as special stock and watermarks. Banking groups are developing new anti-fraud technologies that can be detected by scanners, but these have not been widely deployed. Unlike credit cards, which have strict federal anti-fraud rules, each bank sets its own policies for check fraud.

Still, Mr. Springhetti, said there are ways to combat fraud. Fiserv and others do have software meant to analyze images for signs of fakery. And there are other models that look for suspicious patterns of behavior that may indicate fraud.

What do you guys think? Good idea or massive opportunity for free money to the unscrupulous?

9 thoughts on “Coming soon: Depositing checks with your scanner.

  1. Bad, bad, bad Idea!!! Unless their are some really good anti-fraud procedures implemented.

    I work in the Accounting IT department for an insurance company.  We print our own checks, a process I handle. I can print test checks on a network printer that looks just like a real check (right down to the signature) but aren’t printed on check stock and don’t have the normal method of proving authenticity such as the ink used for the MICR (the strings of numbers at the bottom of the check) is incorrect.

    All of this wouldn’t matter with a scanner, I print checks to a third party, have them cash it with a scanner and route a portion of the money back to me.  Done and done.  Granted in this scenario it could still be easily tracked back to me. But that’s not the point.

  2. My bank is USAA, as is my home owners insurance and car insurance. I love them to pieces! We have never had any trouble, I have done the deposit by scanner, its a java applet that does the scanning, you can’t just scan it in yourself doctor it up and then send it in. A couple of more good points in their favor; all ATM fees are refunded to you once a month, you actually earn a decent interest rate on your savings account, AND your checking account!

  3. I think in concept the idea is quite nice, but as was brought up, the possibilities of fraud are pretty severe.

    Personally I’d prefer if we did more to get off of checks entirely and work more toward directly transmitting money via EFT or whatnot. If I want to send money directly to someone else I should be able to do that without having to go through the archaic process of writing a check. For that matter they shouldn’t have to go through the even more tedious process of cashing it.

  4. I suspect that checks so deposited will be slower to process (to allow authentication) than other sorts of checks.

    I also expect that this will further efforts by banks to handle more transactions electronically, even at home.  If they’re being mandated to do this, they have an incentive to find a more secure way to do it.

  5. Dave if you mean how long it would take for funds to be availble, they are added to your account immeditely. Checks over I think 7000 dollars take a few days to clear. Personally I deposited a 3800 dollar check, and it was in my account right after I was done, and I was able to spend it.

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