Remote deposit clients need to be established enough to have both secure areas and policies for handling checks. “This is a product for a seasoned business, not a start-up,” Bianchi says. “The level of risk is greater in a start-up than in a seasoned business.”
Customers who don’t qualify for remote deposit have other options. They might choose an Automated Clearing House (ACH) conversion, which reads the magnetic line on a consumer’s check and transmits that information to the bank. It’s less expensive than remote deposit, Hatcher says, but isn’t posted until the next day.
A lock-box service, in which the bank receives payments directly from a client’s customers, is another option. The bank opens the mail and processes the checks, acting as an accounts receivable department of sorts.
And, though it won’t eliminate all those trips to the bank, a cash concentration sweep—moving money out of an account at a bank that’s physically convenient and into an account at the company’s main bank—could make your trips shorter. Cash concentration sweeps, Hatcher says, “are a very cheap solution. You don’t have to buy any hardware or software. You just have to have an Internet connection, and banks typically charge very little for that transaction—maybe $1 to $2 per sweep. That’s less than the cost of sending an image file.” However, Hatcher notes that you would pay fees to maintain two separate accounts.
Despite their caution, bankers say they haven’t had trouble so far, and aren’t really expecting to lose large sums through remote deposit fraud. “We’re more concerned about inadvertent re-presentation” than about deliberate fraud, says Joe Grey, a senior vice president in Minnesota for Associated Bank Corporation. A customer the bank knows, he says, is “less likely to practice fraud than someone who just walks into your bank.”
In 2005, Premier Bank dealt with 144 customers whose handbags were stolen, Carnes says. That’s a lot of potential counterfeit checks—and more chance for damage, he thinks, than banks are likely to see from well-vetted remote deposit customers.
Besides, Novitzki adds, banks take a risk every time they invent a new product. “If we wait for a product to be totally fraud-free, we’d never have anything new,” he says. “We wouldn’t have online banking or Internet bill pay. We do the best we can.”
