For all the hullabaloo mobile remote-deposit capture generated in 2010, the availability of the service that enables consumers to deposit checks from home using the cameras on their smartphones remains limited to a few banks’ customers.
But observers expect that to change in 2011 as banks look to further differentiate their mobile and online services.
In pushing mobile, banks are challenged to convince consumers the services are both beneficial and secure, says Mark Schwanhausser, a senior analyst with Javelin Strategy and Research in Pleasanton, Calif.
“This is one of those features that addresses that first problem of, ‘Why do I want to use my mobile phone in banking?’” Schwanhausser says. “The industry is looking for those kinds of examples where people say, ‘Ah, this is better, this is different than online banking. This saves me time.’”
“I put mobile deposit capture in that category,” Schwanhausser says.
To date, only a few banks are offering a mobile remote-deposit feature, including USAA Federal Savings Bank, JPMorgan Chase & Co. and State Farm Bank. Recent moves suggest that soon will change. And banks now offering the service already have begun to expand its availability.
In November, Chase released a mobile-banking application for smartphones using Google Inc.’s Android operating system. The app includes the bank’s QuickDeposit mobile check-depositing feature that made a splash when Chase released it for its Apple Inc. iPhone mobile-app users in July.
PayPal Inc., the alternative-payments unit of eBay Inc., in October added remote deposit capture to its iPhone application and plans to add it to its Android app in 2011.
Mobile remote deposit is the only method PayPal users have to fund their accounts with a paper check. Before PayPal added the feature, users of its service who wished to move funds from a checking account largely relied on the automated clearinghouse system.
“The biggest piece that our customers were telling us is, ‘We want more ways to add funds to our accounts,’” says Avin Arumugam, PayPal senior product manager for mobile.
Also in 2010, several large vendors, including Fiserv Inc., Jack Henry & Associates Inc. and Fidelity National Information Services Inc., struck agreements to offer mobile remote-deposit capture to their bank and credit-union customers using patented imaging technology from San Diego-based Mitek Systems Inc.
“We talk about it as a pivotal or inflection point whereby there will be broader adoption going into this new year,” says James DeBello, Mitek president and chief executive. “2010 for us was a year that allowed us to secure all the major channel partners … who have an interest in extending into mobile” remote-deposit capture.
Financial institutions are interested in mobile remote deposit capture because of the potential to further drive customers to self-service channels instead of the branch, the same factor that drove many banks to invest in online services.
“Because mobile remote deposit obviates the once-vital function of depositing paper checks, financial institutions with a high deposit-to-branch ratio should make this capability a top priority,” Javelin noted in an April report (
Overall, Javelin predicted mobile remote deposit would be “a niche product ideal for smaller institutions with few branches or ATMs,” while large institutions would roll out the service for competitive reasons.
“The four biggest financial institutions in the U.S.–Bank of America, Chase, Citibank, and Wells Fargo–compete by offering optimal services to their mobile-banking customers,” the Javelin report noted. “If one of the four major banks offers the [service], it is likely a domino effect will occur with other banks rushing to provide the solution to prevent deposit flight.”
For banks on the fence about the service, consultant Todd Ablowitz points to usage numbers early entrants have released.
“We’ve certainly seen a great response by the consumers who have gotten an opportunity at the few banks where they can” use the service, says Ablowitz, the president of Double Diamond Group LLC in Centennial, Colo.
Customers of USAA have deposited 2.6 million checks totaling $1.6 billion with a mobile device since it began offering the service for iPhone users in 2009, a spokesperson for the San Antonio-based banking company says.
More than 200,000 members in the past three months have used its Deposit@Mobile service, which also is available for its Android app users, she says.
Users of PayPal’s iPhone app deposited $100,000 worth of checks into their accounts in the first 36 hours of the service going live on Oct. 6, according to a spokesperson. In less than a month they deposited $1 million.
Jack Stephenson, Chase managing director of mobile, e-commerce and payments, would not provide specific use figures for its QuickDeposit service but says adoption has been “well in excess of our expectations.”
Gary Brand, Fiserv director of source capture optimization, attributes the rise in interest in mobile remote-deposit capture to Chase’s advertising for QuickDeposit.
Though Chase is not a customer of Fiserv’s mobile remote-deposit system, the bank’s advertising push has “really done wonders for our business,” says Brand.
Fiserv has two customers piloting its mobile remote-deposit platform, according to Brand, who would not name the financial institutions.
“We have a host of contracts that have been completed and committed to but are not in production yet,” Brand says.
Schwanhausser says it is too soon to say how many banks and credit unions could be live with a mobile remote-deposit service by the end of 2011. Despite receiving a lot of buzz, the service is something that financial institutions cannot rush into, he says.
Banks need to evaluate which mobile-phone types to target, and they must ensure consumers understand how to use it and that the service actually works.
“It is going to take a little bit of time,” Schwanhausser says. “You can’t just throw these things out there and assume that people will figure it out.”
For companies that already offer a mobile remote-deposit service, the next step is to improve the user experience, Ablowitz says, citing speeding up settlement times as an example.
A PayPal spokesperson says it often takes three to four days for funds to appear in a customer’s account after a check is captured with a mobile phone. The company does not have plans to change the processing time of its service, but it is “always looking for feedback and will continue to make improvements as we see fit,” she says.
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