Deposit Paper Checks via Mobile Phone? (NetBanker)

Judging by the title and the date of this post, you might think it a prank.

But no, Mitek Systems has actually developed software that lets you deposit paper checks by taking their picture with your mobile phone and transmitting the images to your bank. The company has a good demo of the service on the product page.

The company first demo'd it to bankers at BAI's Transpay in early February (press release here). I wasn't there but I heard it was a must-see on the trade show floor.

Here's how it works:

Call up the app on your phone (first-time users would need to download the app from the bank)
Log in
Enter the amount of the check
Take a photo of the front of the check
Wait for the software to optimize the photo
Take a photo of the back of the check
Wait for the software to optimize the photo
Transmit it to the bank
Receive a confirmation message from the bank

Analysis
I'll admit, I didn't see this one coming. And I still can't decide if it's a good idea. On the one hand, it's cool and innovative and allows you to do something on your mobile that you really can't do on your PC (although a digital camera hooked to your PC could do the same thing). I could imagine a smaller service business with just a couple checks per month using it. The photo documentation of the deposited check would be handy to have and a dedicated check scanner is too pricey (note 1).

But for consumers? Not many would go through this much trouble to deposit a check. It would be easier to drop it in an ATM, the mail, or walk it into their branch during lunch hour. And no major business can use it. Biz owners don't want their bookkeepers snapping photos of customer checks with their Razr.

If you have a massive tech budget, it might be worth the cost to demonstrate that you are the leading innovator in your market. Or if your mobile banking vendor can deliver this capability within a larger mobile banking system for little or no extra cost, give it some thought.

But if your are already behind on your 2008 plan, your budget fits on the display of an eight-digit calculator, or you are still haven't gotten around to creating an iPhone button for your bank, this is not the project for you.

Let me know what you think.

Note:

1. CheckFree or USAA's system using existing home scanners might work better for most small- or micro-businesses.

Comments (8)

Bob L'Eponge:

just yesterday I was wishing my bank did this. It's pretty far to my nearest branch, but not far enough to warrant posting it. I wouldn't mind scanning it and emailing it to my bank/uploading it to the bank's online banking site.

Plus, with the advent of online banking, fewer and fewer people are using bank branches. So the future is probably going to see the website be more powerful and branches shutting down (sucks for some people!)

Posted by Bob L'Eponge | April 2, 2008 2:54 AM

Posted on April 2, 2008 02:54

Jodi Torres

Mitek also offers the same technology for bill payment....just take a photo of the bill payment coupon and it uploads payee information. The user keys in amount and due date and the application sends back a confirmation. Pretty cool. Just another step closer to loosing the laptop? It begs the question are cell phones the next laptop?

Posted by Jodi Torres | April 2, 2008 10:34 AM

Posted on April 2, 2008 10:34

PKB:

This technology is worth it for consumers, especially those with online banks. Consumers will not have bulk check depsoit requirements. I think it is less convenient to take time out of your busy day to go to an ATM or stand on a bank line. Further, using this technology allows one to conveniently deposit a check without utilizing a cumbersome computer and scanner..truly point, click and process. Thumbs up!

Posted by PKB | April 2, 2008 1:04 PM

Posted on April 2, 2008 13:04

Paul Rosenfeld:

As you note this can become a very useful service for casual depositors and younger folks accustomed to using their cell phone for many things.

I also envision the user experience getting simpler as well. You're thinking it's a difficult experience, but is it really? While densely populated areas might have an ATM from your bank on many corners, less populated areas where you have to drive a bit could eat up something like this. If you sporadically get to the bank, and if it's a schlep, and if the check is large enough, wouldn't it be great to know you're check is getting deposited as soon as you click "send"?

Posted by Paul Rosenfeld | April 2, 2008 9:13 PM

Posted on April 2, 2008 21:13

Jim Bruene

@Paul

Agreed...it all depends on how easy it is to use. For instance, how often will you have to retake your check photo because it's too blurry. Does it take 10 seconds or 3 minutes to do the image enhancement, etc.

If it took less than 2 minutes per check with the photo being accepted 9 out of 10 times, and cost less than $1 per check, I'd use it in my business.

But I think there are quite a few usability questions that need to be answered before I'd recommend it. I've requested demo software, so we'll see.

Posted by Jim Bruene | April 3, 2008 8:46 AM

Posted on April 3, 2008 08:46

Chris Lamela:

This should have the bank risk folks coming out of their skin!

Posted by Chris Lamela | April 3, 2008 10:21 AM

Posted on April 3, 2008 10:21

damon:

downloadable app = non starter

Most users have no idea how to download apps on their mobile, the providers make it a horrific process.

This will change with the iphone as they will come up with some slick way to get apps, probably no harder than getting a song via itunes.

Posted by damon | April 3, 2008 8:52 PM

Posted on April 3, 2008 20:52

Morriss Partee:

I agree with damon, having to download an app to do this is a non-starter. If they can figure out how to do it without an app, then this is huge. I'm not sure where the app fits into this process anyway.

Posted by Morriss Partee | April 10, 2008 9:30 AM

Posted on April 10, 2008 09:30