Remote capture reduces banking headaches

It’s because of the growing popularity of remote deposit capture, an electronic system that allows customers to electronically submit deposits from their offices, rather than hand-delivering checks to the bank.

Several local banks already offer the service, which grew out of Check 21, the Check Clearing for the 21st Century Act, passed by Congress in 2004. The legislation makes electronic images of checks acceptable alternatives for the actual pieces of paper.

While most area banks have had the ability to provide the remote deposit service for at least a year, most have not been actively marketing it until recently.

“We call it putting the bank on your desktop,” said Whitney Morrow, senior vice president of treasury services at Commerce Bank, which has offered remote deposit capture for about a year and a half. “It just basically took down geographic barriers and gave the customers a lot of convenience,” she said.

How it works

Though different banks use slightly varying versions of the scanning system, the basic process is the same. Checks are scanned through an optical reader that, depending on the complexity of the scanner, can read the front and back of the check and read the numeric and written amounts on each one.

Some systems can compare the total amount to the total entered by the employee, adding to accuracy. Some are able to scan multiple checks at once.

Scanners, which are available through banks or independent banking supply vendors, can cost between a few hundred dollars to several thousand dollars, depending on capabilities. Beyond that, monthly service charges vary from bank to bank and often are determined by volume.

Getting off the road

One Commerce Bank remote deposit customer, Andrews Farm and Seed Inc., saves time and gas money by using remote deposit capture, according to Glenda Erwin, office manager of the company, located 13 miles east of Carthage.

“My office is literally located in the middle of a cornfield,” Erwin said. “I was having to get off work, go to Webb City, which is from here about 25 to 30 miles, and get to Commerce Bank while they were still open to do deposits. We also did a lot by mail, but if I had more than $30,000 or $40,000, I wasn’t really comfortable (mailing) that.”

The deposit capture system, Erwin said, has allowed Andrews to process 25 to 30 checks weekly since the company started using the service in mid-July.

Watching the clock

Another advantage: daily deadlines. Most banks put any deposit made after 2 p.m. or 3 p.m. on the next day’s business, which can cause some headaches for companies balancing their monthly books.

“Especially the last day of the month, where you may have $80,000 or $90,000 to deposit and want it in on that month, it’s just easier to have it all in there when you want it,” Erwin said, adding that the deposit deadline for Commerce remote deposits is 4 p.m.

The extended business day is one reason the service has been popular at Oakstar Bank, which began offering it about two months ago.

“The response from the customers we’ve offered it to has been wonderful,” said Kira Owens, Oakstar banking center manager. “They love the convenience, they love the extended cut-off time for deposits ... and it’s easy to use.”

Getting on board

Though the technology has been available for remote deposit since late 2004, business has really picked up in the last few months for most banks.

UMB Bank began offering the service in fall 2005.

UMB President Ann Marie Baker said the recent response to the service has been better than expected.

“The technology has been embraced by all sizes of business,” Baker said. “In fact, we have been marketing the product and educating our customers about it, but in many cases we’ve been approached by customers who we haven’t told about the service.”

Charlie Masters, chief financial officer for Webb City-based Cardinal Scale Manufacturing Co., said his company just signed up for the service through UMB. In addition to the convenience of one less daily trip to the bank, the service adds a feeling of confidence for his customers and employees.

“People ... see this type of technology when they go to someplace like a Wal-Mart or other big business, so when you do go out into the business environment, people are familiar with it,” he said.

Check 21 Law

The Consumer Checking Account Fairness Act – or Check 21 – took effect Oct. 28, 2004. The new law was introduced by Rep. Carolyn Maloney, D-N.Y.

Under Check 21:

• Check hold time is reduced to no more than two business days for consumer check deposits of up to $7,500, including nonlocal checks.

• Sunday is counted as a business day toward the check-hold period if the bank debits from checks on Saturdays.

• Banks are prevented from charging bounced-check fees when the deposit to cover the check has actually cleared but the hold period is not completed.

• Banks that wish to charge bounce-protection fees are required to get customers to ask for such protection before charging fees for it.