Remote deposit is a service that allows you to make payments without having to submit physical checks to your bank or credit union. You can receive faster deposits and fewer errors by scanning (or photographing) checks instead of moving physical paperwork around. 1
What Are the Benefits of Remote Deposit
Businesses were among the first to adopt remote deposit technology. When a company receives a significant number of checks, it has to be able to access funds rapidly for operations, payroll, and expansion. Individuals: Customers also like the simplicity of making deposits from afar. Busy people now want accounts that allow them to deposit checks using a mobile device, eliminating the need to visit a bank location. Remote deposit is used by nonprofits, government agencies, and other organizations. Because the technology is widely available, businesses can choose lower priced services and hardware when it makes sense. This page is mostly for business purposes. See How to Make Mobile Check Deposits for further information on making deposits to personal checking accounts. A mobile device is a wonderful choice for remote deposits for small businesses and organizations that don't get numerous checks. In other cases, dedicated hardware can do a huge number of inspections quickly.What is Remote Deposit Capture and How Does It Work
To deposit checks remotely, you must first take a picture of the check. Your bank receives the image and begins the process of collecting funds from the check writer. Your bank turns those photographs into a substitute check, which can be used in place of the original paper document, thanks to Check 21 regulations. Dedicated check scanning machines and mobile devices: Businesses have traditionally employed dedicated check scanning machines. Depending on your needs, remote deposit scanners might cost anything from a few hundred to a few thousand dollars (depending on how much volume you process). Some banks charge a monthly fee for a scanner, while others offer one for free in exchange for your business. However, expensive scanners aren't always required. Some banks allow you to capture photographs with a regular computer scanner, fax machine, or even your phone's camera for low-volume users. Depending on your service provider, you may be required to enter the amount of your deposit, or the remote deposit system may do so automatically. The accuracy of automated reading is improving thanks to artificial intelligence, and the more checks you complete each month, the more you'll appreciate that feature. After you've scanned the paper checks, save them until your bank tells you it's okay to discard them. Banks may need a higher-resolution photograph or even a physical duplicate of certain checks. Follow your bank's recommendations, and make sure you have a system in place to prevent you from depositing the same check again.Availability of funds
One of the main advantages of using a remote deposit service is that you can avoid "banking hours." To avoid the day's deposit cutoff time, most banks enable you to process checks late into the evening (until 10:00 p.m. or so in some time zones). Your bank will usually make the funds available to you within one business day (but there may be delays). That's fantastic news, and you might believe it's because of technology, but there's a catch: the money didn't move quite as quickly as you might expect. Your bank simply thinks that checks will not bounce, but you may have to wait many weeks after depositing a check to know for sure if it is valid. You have access to the money during that time, but you are accountable for the deposit. If the check bounces or is returned for whatever reason, the bank will withdraw the funds from your account, and you'll have to deal with the implications if your account goes negative (including paying any bounced check fees that your bank charges). If you're concerned about the checks your customers write, take action to avoid bad checks. You can also sign up for a check verification service, which can help you spot issues and may even pay you if faulty checks fall through the gaps.Remote Deposit Services: Where Can You Find Them
The majority of banks and credit unions can assist you with setting up a remote deposit. If you're a customer, it's very simple: simply download your bank's app, which is almost certainly already installed. Specialized hardware may be required by businesses, and it's critical to understand how your business account operates (fees for each check, for example, and alternative methods of customer payment). You could even use your bank's treasury management or lockbox service to outsource payments.Why Do Banks Provide Remote Deposit Services
Banks and third-party service providers are eager to offer businesses and consumers remote deposit capture services. Customers benefit from it since deposits are handled more quickly and are more convenient. Banks can save time by using remote deposits. The image is created by the customer rather than the bank, so there is no need for a teller or a branch location.Remote Deposit's Advantages and Disadvantages
You will save time and possibly money by using remote deposits. You can avoid bank trips, armored car services, and time spent waiting for checks to float. There are, however, tradeoffs. With a remote deposit system, there's always the possibility of an error. You run the risk of hardware failures and errors when you automate things, and the problem is amplified when you have a lot of them. On the other hand, when the system runs well, human errors are practically eliminated. When you convert to a remote deposit, you may need to look into additional legal difficulties. Because you're not sending checks to the bank, you must follow the regulations for handling checks once they've been scanned. Request advice from your remote deposit service provider on how to stay compliant.Frequently Asked Questions (FAQs)
How long does it take to make a remote deposit
Unless there are issues with the image, a mobile deposit takes no longer than a traditional check deposit. Many checks clear in less than a full business day, while it might take up to two full business days for other checks to clear.What is the procedure for endorsing a check for remote deposit
What to write on the check endorsement will differ depending on the bank. You can expect anything along the lines of "for mobile deposit," but if you're not sure what your bank requires, you should contact customer care for clarification.