Mobile Deposit Capture Seems Like a Half Solution…

I read yesterday that mobile users deposit more than $40B in checks via smartphones, tablets. Well that is great news, isn’t it?

While I am a fan of remote deposit capture and now will never travel to the ATM to deposit my checks, I feel it is only a half solution…Let me explain

Earlier this month, I was getting some work done at my rental property in VA and needed to pay my contractor. The contractor, not wanting to pay interchange, accepts only cash or checks. So I did what most people do in that situation. I logged into my Chase account and scheduled a bill payment through Chase. Chase sent a manual check to the contractor and took 5 business days for the contractor to receive the check (essentially causing a 5 day delay in getting the work started on my rental property).

Suddenly a light bulb went on. While remote deposit capture will help my contractor deposit that check quickly into his bank account, it doesn’t simplify the process of sending the check to my contractor. So why is it that we have to send a manual check that then gets digitized and submitted into my contractor’s bank account? The only 2 people who are benefiting from the current process are 1) my bank who earns a float on the 5 day period since the money gets debited from my account the minute I hit “send” and 2) the postal service.  Why can’t I just text my contractor an image of that check?

Here is what the process should look like (in my ideal world)

  • I log into my bank and write a check on my tablet or mobile device (or worst case click a picture of a manual check)
  • I sign the check electronically
  • My contractor receives an email and text copy of the check
  • My contractor does an electronic endorsement
  • The check gets deposited into his bank account (RDC takes over from here)

With the new approach, my contractor gets immediate access to the funds.

Manual checks are still big in the B2B world. Last time I checked, 70% of monthly B2B payments are still made via check.

Thoughts? Comments? Please write in and tell me what you think

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Email: guptanitinonline@gmail.com
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About Nitin Gupta

This blog compiles my thoughts and views on the innovations, tools and trends in digital marketing. I have spent more than a decade in financial services, last few studying retail banking and payments industry trends. Particularly interested in the convergence of digital, data, technology and financial services. Email: guptanitinonline@gmail.com Twitter: NitinGuptasays LinkedIn: http://www.linkedin.com/in/guptanitinonline
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1 comments
briangross
briangross

Mmmm.... really the check is just a silly paper order for an ACH payment... so why not get your contractor's bank account number and routing number and send him an ACH payment... and why don't banks allow this (only a few oddball ones do, calling it "direct transfer" or some such...). To replicate the silly "check" image is... silly, let's skip it. Unfortunately we have to convince ordinary folks that there is no danger in "giving away" their bank account number. However this is how it's done in virtually the entire rest of the world outside the USA.