Remote Possibilities

If a paper check becomes necessary—because one of the banks doesn’t accept electronic imaging, or because a bank customer re-quests a physical record of payment—Check 21 allows banks to create a substitute check. Substitute checks enjoy the same legal standing as original checks.

Electronic check transfer hasn’t become the banking industry standard as fast as some in the industry had hoped, largely because some banks have been slow to invest in imaging technology, and because creating substitute checks can be expensive. But most industry watchers expect that electronic imaging will eventually dominate check processing.

Extending Technology to Customers

Each bank’s remote deposit product differs, but the basic shape is the same. Remote deposit customers get a scanner and proprietary software—which runs the scanner and allows them to send check images—from their bank. Though some banks ask customers to buy scanners from third-party vendors, many more prefer to sell or lease scanners to their customers, because doing so allows them to support just one combination of scanner and software.

“The bank doesn’t want to be supporting 15 different vendors,” notes Crystal Hatcher, senior vice president of operations at Bloomington-based Venture Bank. Some banks have developed their own software; others buy it from outside programmers. Still others, particularly Wells Fargo, have designed remote deposit systems that run through an Internet portal. This lets customers make remote deposits without installing new software on their computers.

After getting training from the bank on how to use the system, the operator scans checks for deposit. Some systems have a software component called CAR-LAR, which stands for Courtesy Amount Recognition/Legal Amount Recognition; CAR-LAR reads the amount of the check and totals to make sure the value matches that listed on the deposit slip.

After scanning the checks, the operator makes sure that each one went through correctly, and types in any information that the scanner didn’t read on the first pass. (Remote deposit scanners typically read about 80 percent of checks accurately on the first try.) Many scanners can also tell the operator if a check is a duplicate of one that’s already been scanned, and some machines ink successfully scanned checks with a mark or phrase that indicates that they’ve been presented for payment.