Deposit Checks By iPhone

kaychoro writes to mention that at least one privately held bank is planning on removing a little bit more legwork for the consumer by allowing the electronic submission of paper checks via a new iPhone app. The app would allow users to take a picture of the front and back of the check and submit that to the depository. "Customers will not have to mail the check to the bank later; the deposit will be handled entirely electronically, and the bank suggests voiding the check and filing or discarding it. But to reduce the potential for fraud, only customers who are eligible for credit and have some type of insurance through USAA will be permitted to use the deposit feature. Mr. Peacock said that about 60 percent of the bank's customers qualify."

Comments

Re:State of the art

[Albanach]

Indeed. It's all a bit strange in the US. If you owe someone money you have to write a cheque. Apparently procedures arr so lax though that by having the account number and routing code, people can empty your bank account.

There doesn't seem to be any reasonable way for ordinary bank customers to transfer money to customers of other banks. So in the UK with faster payments now in place at most banks, you can send money to someone else's account alost instantly. In the US, you write a cheque, put it in the post and wait. Then the recipient gets it and sits on it for a few weeks/months until they get to the bank and deposit it. In the meantime, you have to keep track of outstanding cheques in case someone sits on it for several months then sends you overdrawn.

For most other functions, US banks ahve done a pretty reasonable job of getting things automated and electronic. Given the high cost of processing cheques, I'm at a complete loss as to why they still exist let alone are in day to day use.

Re:State of the art

[anegg]

I believe that you can thank the FDIC "Know your customer" program for the hassle to which you refer. Prior to the 2001-09-11 destruction of the World Trade Center in New York, attempts to put the "Know your customer" program in place were being soundly rejected by the banks due to their effects on privacy. This program, by requiring all banks to somehow "know" everyone with whom they do business, and to report to the government any "suspicious" or "unusual" activity, acts to get information in to the government that would otherwise be inaccessible due to the need to have probable cause before issuing a search warrant. After the event I mentioned earlier, these programs where whisked into place. So cashing checks at a bank where you don't have an account, even when it is the bank upon which that check is drawn, is now very difficult because that bank has to somehow "know" you (i.e., by taking your thumbprint in this case).

Another example of this post-9/11 risk avoidance is a hesitancy to deal in cash at some financial institutions. Schwab refused to take a cash deposit from me of approx. $10K into my CMA account at one of their offices. I believe it was because they didn't want the risk of being responsible for that amount of "untraceable" value entering the system. I had to deposit the cash into my bank account, then transfer it to Schwab. If I turned out to be a Bad Person (tm) then Schwab could just point the investigators over to the bank, and it would be the bank's problem that they accepted such a large amount of an untraceable currency... Perhaps the presumption is that my bank could know me better somehow than Schwab could.