If you don’t like going to your local bank branch to deposit a check, you could be in luck. Online-banking service provider CheckFree, which is now part of information management firm FiServ, today said it was rolling out technology that will let customers scan checks through their home computers and deposit them electronically via the Internet.
CheckFree's Remote Deposit Capture for Consumers service is typical of offerings that previously were usually only available to business users. RDC lets users to scan checks and transmit the scanned images to a bank for posting and clearing.
The first issue will be security no doubt. But CheckFree says its service uses the financial institution's existing online banking portal, leveraging existing security methods for login IDs, passwords and data encryption during image and data transfer.
The offering can support any generic scanner, letting consumers use existing scanner hardware, the company said. Consumer capture employs sophisticated image and character recognition capabilities in order to read amounts and account information and accurately crop and verify the consumer's check image in an automated fashion.
According to the company the service will lower ATM fraud cost, by eliminating empty envelope fraud which accounts for more than half of all ATM deposit fraud, according to a 2006 white paper published by ATM manufacturer Diebold. Plus customers won’t have to use their cars for a bank trip.
For financial institutions the service could reduce operating costs and environmental costs associated with branch operations, back office processing and transportation because checks will be submitted and processed electronically, the company said.
How many banks will ultimately offer the service remains to be seen but CheckFree's has its technology in the top 150 banks today, according to an Associated Press article.
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Forged Checks?
Even if CheckFree uses the banks' existing online banking portal, how is this going to stop people from creating and depositing forged checks? Let's say a college kid takes a blank check from his grandma, fills it out for a thousand bucks, 'signs' her name, scans it, and deposits it in his account. Seems like it would be much easier than bringing the forged check to the bank itself.
Forged checks
As part of the banking systems high-speed check processing system, software is used for signature comparison. If the characteristics of a signature are disparate from the questionable check vs. scanned-in signature on the signature card -- which can be accessed from any of the payee bank's computers-- it will flag the check for human comparison.
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