Almost ten years ago, the government passed a law that made electronic images of paper checks just as legitimate as the paper checks themselves. As banks implemented the law, it saved time and money by allowing banks of first deposit to scan checks after a customers deposit them for verification with the originating bank. With an image of a check being accepted in place of a paper check, more banks have begun implementing a convenience to customers as well.

Businesses were the first customers to receive these benefits. For a business that receives thousands of checks every day, bringing the physical paper checks to a branch for deposit can be an expensive and time-consuming process, fraught with the possibility of security problems with the checks in transit. Banks have offered business the option of remote deposit. With this service, the customer can scan checks using a specialized imagine device (check scanner) and transmit the images securely over the Internet or a private network connection. The funds are then available immediately rather than overnight.

With this success, banks are in the process of extended similar features to non-business customers. With the proliferation of cell phones with built-in, high-megapixel camera, banks can now offer deposits using snapshots of checks sent via text message or custom smartphone apps. For these customers, no bulky desktop scanner is necessary, and there’s no need to be home to make the deposit. You can effectively deposit checks from your mailbox down the street or from your grandmother’s house on your birthday.

Business customers still have the advantages, with very few banks actively offering this service to non-business customers. The number of banks offering this service to consumers is increasing, however.

Remote deposit is most useful for banks that don’t have local branches, like these online banks. ING Direct, still bloggers’ most favorite bank, is working to implement remote check deposit soon, but with the bank’s planned acquisition by Capital One it’s unclear when new features will be added. ING Direct recently began offering paper checks to customers, so remote deposit capture may not be too far behind.

Chase Bank offers apps for iOS and Android devices. The application allows customers to log into their bank accounts. To deposit a check, take a picture of the front and back, and send the images securely to Chase using the application. The deposit will be recorded as pending immediately, though availability will depend on the bank’s typical schedule, usually next business day availability for local checks. The availability schedule has several variables, though, so always check with the bank to determine when the funds you deposit will be available.

Ally Bank has offered remote deposit for customers since April 2011, but the bank has just recently opened the program to all customers. Ally’s eCheck Deposit service requires a scanner and some manual work, such as inputting the check amount (shouldn’t this be automatically read when scanned?) and aligning the images. Ally plans to offer a mobile application soon.

The USAA Bank mobile application for iOS, Android, and Windows Phone 7 includes a feature allowing remote deposit. Deposit@Mobile requires the customer to enter the check amount, take one photo of the front of the check and one photo of the back, and submit the images to the bank through the application. The bank will confirm the deposit amount.

Have you used your bank’s remote deposit service? If so, what did you think of the experience?

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