I was driving back from camping near Maricopa when I heard a radio commercial. Chase offers its account holders the option to deposit checks via a cell phone. How this works is that the customer takes pictures of both sides of the check, and then sends these images to the bank and the bank deposits the check. The service is available through a special app at the Apple Store for now.
The service is primarily selling as a convenience. It definitely could save time if a person wants to deposit a few checks, although it seems like it would be inconvenient when depositing many checks at once. It could be a way to perform a deposit during special circumstances, such as when the bank is closed or the ATMs are not functioning.
This service provides a significant environmental benefit. Like the OCR readers at the Chase ATMs, mentioned in this earlier article, this technology removes the necessity to use items such as a deposit slip and an envelope, and reduces paper waste. Like the OCR machines, flaws in computerized character recognition may require tellers to verify the checks after the computer scans them, so a check deposit by cell phone could also take a day or more to clear. The OCR machines work best with checks from other Chase accounts and are less effective when using checks drawn on other banks, so similar results when using a cell phone would not be a surprise.
The main benefit is depositing a paper check remotely. Direct deposit conserves a lot of paper, but many businesses and government agencies still issue paper checks. To deposit a paper check, you would normally have to travel to the ATM, or send the check through the mail. Maricopa, my location at the time I heard the commercial, is not a large city. It is likely that many residents of this town and the nearby areas have to drive into Bakersfield to perform many banking services, such as depositing paper checks. The use of a cell phone allows a person to cash the check instantly without driving into town, as the account holder may not have time to wait for the postal service to deliver the check.
I’ve noticed a change at the ATM lately. After Washington Mutual was taken over by Chase the local bank was refurbished and redesigned, and there were a few changes I was not expecting. I think the main thing I noticed was the new ATMs. I used to deposit checks in the machine through a process that took several steps. Customers would fill out the bank deposit form, insert it in an envelope, and then drop it in the machine. Chase has managed to streamline the process quite a bit. The new machines have optical recognition technology, and can read the ink on the checks to carry out the deposit. This is a bigger deal than it may seem at first. Both the deposit form and the envelope the check is placed in are now no longer necessary. Since Chase is gigantic after buying out many other banks, this probably saves thousands of envelopes and deposit forms a day. Very helpful, as although you can recycle paper, it is much harder to recycle paper that’s been mixed with other substances such as glue. This is a big reason why certain apparent improvements, such as switching to wax paper packaging, actually increase the amount of nonrecyclable waste that is generated.
I had already noticed that receipts were optional in a lot of places. If you are recording the transaction elsewhere, it can save a lot of paper to not get a printed receipt, although it may still be necessary for verification purposes. Every bit adds up. Then I wondered whether the other banks had switched to this new optical verification system. A little searching showed that New York ATMs were introduced with the optical character recognition technology in 2008. Seems like this was a trial run, and they only rolled out the technology across the entire nation recently. This is a good thing, as Totochi reports some major issues with the OCR software. It cannot always read the checks correctly, and I have noticed this on several occasions although it is an uncommon occurrence. When this happened to me, the ATM gave me the option of entering in the deposit amount myself, although there is an obvious disclaimer that funds may not be available until a teller verifies the check. Same with any ATM, unless you go inside and wait in line to drop the check off. The point that Totochi brings up is that he did not receive the chance to enter in the deposit amount. I had not known that this could happen, and not sure what circumstances would make it happen, although my guess is that there was something else nonstandard about the check other than being able to read the image on its face. I have only used checks from a checkbook in this machine since it was introduced here very recently, so not sure how robust this setup is with other types of printouts and ink. Potentially this is a big problem since Totochi mentions that the machine will not accept the check at all in some cases, I would suggest that a dropoff box remain present in case of something like this happening.
Searching around a bit more found the title of the new process, Courtesy and Legal Amount Recognition , or CAR/LAR. Several other major banks offer the OCR service, including Wells Fargo and Bank of America. It is good to have this option even though I use a debit or credit card for most transactions, since many government or legal services require a physical check. Likely this is to reduce fraud, as a signature is still one of the better ways to confirm a transaction. Seache Banche, an Italian company, also makes these machines, and seeing them all across the European Union would be a welcome sight.