Posts Tagged ‘banking’

Remote Deposit Functionality

Wednesday, December 24th, 2008

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remote depositHave you ever been a few days away from pay day, short on cash, but needing to buy something? We’ve all been there. And face it, most people have done what has been coined as “floating a check” at some point in their lives. You know what I’m talking about; with little to no money in your checking account, you write a check for the amount of your purchase knowing it will take a few days for the merchant to cash the check and the check to make its way from the merchant’s bank to your bank and come out of your account. While risky, this action has made it possible for many Americans to make it from paycheck to paycheck with the things they need. However, thanks to a new technology called “remote deposit” the days of “floating checks” may soon, if not already, be over.

Previously, merchants accepted checks in their store and made daily or weekly deposits at the bank by manually grouping all checks received and calculating the deposit. They then drove to the bank where a teller would confirm the deposit and sometimes place a one to ten days hold on items to ensure they were processed as “clear”, or ensure that there were enough funds in the originators account to cover the amount of the check.  Merchants are unable to access any of the funds that have been placed on hold for the set amount of time. Sometimes it could take days for checks to travel from various banks around the country.

“Remote Deposit” is a technology which makes making bank deposits much easier and faster for merchants. In the store, clerks accept personal checks, business checks, and money orders from customers. They run each item through a small machine which scans the document and records a digital image of the front and back of the document. The image is then grouped and through the use of specially designed software, deposited into the store’s bank account through the Internet. The new technology makes it possible for merchants to access their money faster, eliminate trips to the bank, and makes handling checks much easier for merchants.

As we become a more globalized society, banks have begun to accommodate our lifestyles by providing us with technology that suits our needs quickly and efficiently. The new Remote Deposit technology makes it easier and faster for money to travel. With this technology, writing a check is now almost as fast as swiping a credit card through a terminal. Essentially, the two technologies work much in the same way. While the number of checks written each year in the United States is declining, due to the increased use of credit and debit cards, there are still over 40 billion checks written each year. This new “Remote Deposit” feature makes it easier and faster for these check transactions to take place. However, it also eliminates the time lapse in between the time a check is written and the time it is cashed, to allow for extra deposits to be made.