Scanning Your Money to the Bank

By Saul Hansell

Hereís advance word of another bit of Rorschach technology: Some people will look at is a great innovation; others as a solution to a problem they donít have.

Soon you will be able to deposit checks by scanning them at home and sending them electronically to your bank. No need to visit a branch or even an ATM.

This is possible because of the Check Clearing for the 21st Century Act, passed in 2003, which allows banks to exchange electronic images of checks. Already about half of all checks are scanned by businesses or the banks they are deposited into and not shipped in bags back to the banks on which they were drawn.

Fiserv, the big transaction services company, has announced new software that will enable banks to let home users deposit checks by scanning them. It already has a similar service for small and medium businesses. USAA, the financial services company that serves the military, has offered deposits through scanners for two years, but the idea has not yet caught on.

The time is right for such a service, said Rodney Springhetti, a Fiserv vice president of business development. The technology has been debugged through several years of working with businesses, and meanwhile consumers increasingly have scanners at home, largely in the form of all-in-one printer units.


To use the service, consumers would sign onto their bankís Web site, activate a piece of software, type in the amount, and then scan the front and back side of each check they want to deposit. The bank has the option of immediately sending the check image to be cleared or to have a human review it first.

Mr. Springhetti said that some banks may charge an extra fee for this service, but others may give it free to customers. He expects it will be especially popular among brokerage firms and banks that deal with more affluent customers.

Fraud, of course, is an issue. Where there are scanners, of course, there may be Photoshop. And a scanner canít detect all the anti-fraud features now built into paper checks, such as special stock and watermarks. Banking groups are developing new anti-fraud technologies that can be detected by scanners, but these have not been widely deployed. Unlike credit cards, which have strict federal anti-fraud rules, each bank sets its own policies for check fraud.

Still, Mr. Springhetti, said there are ways to combat fraud. Fiserv and others do have software meant to analyze images for signs of fakery. And there are other models that look for suspicious patterns of behavior that may indicate fraud.

Put me down in the category of people who would be glad to use this sort of thing, assuming it was free. Diverting myself to make a deposit in the bank adds nothing to my life.

But it also shows that there is something seriously out of whack about the way the banking system has evolved.

In the electronic age, there really isnít a need to use paper at all to get money from one bankís computer to another bankís computer. But the system of routing and account numbers used for direct deposit is simply too cumbersome to use for payments. It canít be that hard to figure out a better way. But for now, weíre either going to the bank or trying to get our scanners to work right.


http://bits.blogs.nytimes.com/2008/0.../index.html?hp