How Remote Deposit Capture Works

Deposit Checks Electronically

Writing a check
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Remote deposit is a way to process payments without sending checks to the bank. With remote deposit, you can scan (or snap) an image of a check, send the image to your bank, and see the funds added to your account more quickly. Let’s cover the basics of remote deposit technology.

Who Uses Remote Deposit?

Everybody. Businesses were the first users of remote deposit technology. They see a large number of checks, and they want to get checks processed quickly so they can use the money for operations.

However, consumers want the same thing, so personal banking customers also have the ability to deposit checks without getting them to the bank (with a mobile device, for example).

How to Use Remote Deposit

To use a remote deposit service, you need a picture of the check. The image is sent to your bank, and the bank begins the process of collecting money from the check writer.

Traditionally, a special check scanner was used for businesses. Remote deposit scanners can cost a few hundred dollars or a few thousand depending on your needs - such as how much volume you do. Some banks just charge a monthly fee for a scanner, and some will throw in a free scanner as a promotion to win your business.

However, expensive scanners are not always necessary. For example, you may be able to use a plain old consumer scanner for personal remote deposit. Some banks allow you to use a fax machine, and some even allow you to use your mobile phone's camera for remote deposit.

Problems With Remote Deposit

It’s possible that remote deposit will save you time and money. You may be able to skip trips to the bank, armored car services, and time waiting on check float. However, there are tradeoffs.

There’s always the chance that your remote deposit system will have errors. By automating things, you run the risk of errors.

Of course, you might reduce human errors at the same time.

You also have to worry about new legal issues when you switch to remote deposit. Since you’re not sending checks to the bank, you have to know the rules about how to handle the checks after you scan them. Ask your remote deposit service provider for suggestions on how to stay compliant.

The growth in remote deposit services has grown as the world has become more electronic, and as a result of legislation such as Check 21.

Why Banks Offer Remote Deposit

Banks and third-party service providers will increasingly offer remote deposit capture services to businesses and consumers. It makes life easy for customers: deposits are faster, and they’re much more convenient.

Remote deposit is also less labor-intensive for banks. You’ve created the image so they don’t have to.

Remote Deposit Banks

The list of banks offering remote deposit capture features is constantly changing. You can find a good list of most banks here. USAA has been a leader in offering personal remote deposit for non-business accounts. You can watch a demo of their service online. Most internet banks allow you to make deposits with your mobile device, and small banks and credit unions are also getting in on the game.

If you run a business, you may also find that treasury management or lockbox services perform remote deposit capture for you.