Depositing checks with a scanner

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USAA, which I’ve raved about in the past, has a very interesting new product offering called “Depost@Home”: a way to deposit checks over the Internet, using a scanner. Zoinks! From their press release:

Starting today, home banking takes on a whole new meaning for members of USAA Federal Savings Bank (“USAA”). USAA is now the largest nationwide bank to offer an easy-to-use, secure new service that enables its customers to deposit checks into their bank accounts using a scanner and an Internet connection….USAA bank customers simply scan, click, and confirm. They can access their money faster than ever before….Deposits received before 8 p.m. Central on a business day are credited that same day.

Uh, wow! I know this has been done before in more limited form, but I think it’s an incredible sign of where Internet banking is going. Some more coverage of the launch:

As I mentioned earlier, I’m trying to get in touch with someone at USAA to talk to them about their change in eligibility requirements for banking accounts. If anyone has a contact or could introduce me to Mike Luby, I’d be most appreciative. I get a huge amount of interest in USAA through our support address, and I’d like to be able to give people the correct information on the bank.

26 Responses to “Depositing checks with a scanner”

  1. Glen Says:

    When was the last time you actually used or recevied a cheque? I don’t think this is the way internet banking is going. I think internet banking means getting rid of all paper and cheques. At least in NZ you just transfer money from your internet banking account into anyone elses account with no need for a cheque.

  2. Marc Hedlund Says:

    I get checks all the time, actually — I think they’re more common in the U.S. That said, you’re right that they’re on the decline, even here. Checks are often cited as one of the reasons someone might want a physical bank branch to visit, but it seems to me that USAA, and others, are obviating that need with techniques like this. I think it won’t be long before there’s no reason to have a bank branch, and that’s a great thing for consumers — as long as the phone customer service is reasonable.

  3. Cindy Says:

    Checks are still common for certain things — some companies won’t direct deposit reimbursment checks, for one, and my grandma still sends me a ten dollar check ever birthday, without fail! They’re also often used among my family when we go in together for large gifts — I’ll buy the big gift for my parents, and all of my siblings will write me a check for their portion. I haven’t used the Deposit@Home yet, but I probably will at some point after Christmas!

    As for USAA, the only problem I’ve seen is cash — I worked as a server through college, and during that time nearly all of my income was cash, and my USAA account sat dormant. There is still no convenient way to desposit cash through their banking services.

  4. Marc Hedlund Says:

    Good point, Cindy. Hard to see how a scanner will help with cash, but maybe something like Western Union would.

    For a while, I kept an account at a local bank so I could have a safe deposit box there. I wonder what the hold-out features of bank branches will be, and whether some new kind of business that offers just those hold-outs will emerge.

  5. badgerW Says:

    I doubt this is a completely paperless process. AFAIK there is still a “paper chase” going on in check remittance. The paper check still has to end up at its issuing bank eventually. As a consequence, I can see a scan of the checks I write when I login to my account at my bank’s website. Checks are now being “cleared” electronically, but the paper still goes through eventually. I’m guessing that we’re in somewhat of a transition period here.

  6. Christopher A Webb Says:

    Glad to hear USAA is again leading the industry. My father was in the service, therefore I have had access to all of their great services. As far as cash goes, I too had the same issue of not being able to easily deposit it. I was a server and had at least a hundred dollars in cash a day I needed to deposit. USAA cam out (last year I believe) with a service called QuickPost (not the only bank that uses it). All I had to do was go to the local UPS store. There was a grocery store next door that I would go in and buy a money order for 50 cents. Then walk next door to the UPS store, hand them my money order and a QuickPost envelop, and my money would be in my account the next day.

    I have always enjoyed USAA and their great service. I think they are able to keep their great rates and exclusive services by limiting their market saturation. Currently I believe Service Members, Previous Service Members (w/o dishonorable discharge), their spouse, and their dependents are all eligible to access USAA.

  7. Cindy Says:

    Concerning access to USAA — the access is a little more expanded than that. My grandfather was a navy doctor and was thus eligible, and my mom, as his dependent was also eligible. My mom added my dad to her accounts and he became a member, then when I was still a dependent I opened an account in conjunction with my dad, and became a member. Then, when I was on my own and had opened separate accounts, I added my fiance to my checking account, thus making him a member. So it seems like as long as you are connected to a member who trusts you enough to add you to an account of theirs, you can become a USAA member, remove yourself from the original member, and have your own accounts.

    Does that make sense to anyone except me? 😛

  8. Jason Says:

    Two points. I am new to USAA and loving it. I used my scanner jsut yesterday to deposit several checks.It was very easy and posted instantly. At the end of the process, it instructs you to void and destroy the check. I did not do this quite yet, need to gain more confidence in the system first. But it is getting rid of the paper, I for one am all for it.

    Question-
    My wife is in the reserves, I am not. I got my membership when I married her last year. My dad was in the service almost 30 years ago, the website states he is no longer able to become a member. Does anyone know a way he could become a member through me?

  9. derrich Says:

    They actually have these types of products for commercial use already. For example, Frost Bank in my hometown of San Antonio (same as USAA), was the first (as far as I know) to use this “remote capture” product for its commercial clients. The difference is that they supply you with the hardware, which scans and endorses the check (read more about it here). The user keeps the checks for an certain period of time, at the end of which they may do with them as they please. Paperless. See “Check 21” at Federal Reserve Board. USAAs setup allows you to use your own scanner (if you don’t have one, they’ll give you a gift certificate to purchase one). You scan the check, and transmit the image to USAA. They then run it through some sort of fraud detection system to make sure you’re not running the same check more than once and deposit it same day (for checks less than $5,000). Eligibility-wise, I think you have to be an insurance customer as well as make x number of deposits per month…initially. DISCLAIMER: I’m not sure how much of this is accurate info, but I’m about 98% sure about what I wrote. I’m still looking for more details.

  10. Matthew Says:

    I love Deposit@Home since I don’t make it to San Antonio too often.

    The QuickPost service was discontinued, in fact that is how I heard about Deposit@Home, in the letter telling me that QuickPost was closing. NetBank owned QP and decided to close it, USAA was just a QP client.

    It is important to note that paper checks no longer need to return to the maker’s bank. An earlier poster mentioned that they did which is not correct since Check21 came into force. The scanned image is just as valid as the paper check. Insofar as each check is unique – ABA number, account number, check number and amonut depositing a paper check after scanning it would soon be noticed. I assume that USAA would kick you to the curb at that point and rightly so.

    USAA rocks I’ve been banking with them for a decade and insured with them for a few years longer. There is no better bank around.

  11. kjbetz Says:

    My financial institution, Pennsylvania State Employees Credit Union (PSECU), I’ve been using for many years has had what they call “UPost@Home” for years. In this process you type in the information of each check and “deposit” it. The funds are immediately available and you then physically mail the checks into them. They then scan them in and complete the posting process.

    This is a very interesting process with USAA of scanning the checks in and then being able to destroy them. No physical sending in of the checks.

  12. Letty Says:

    I work at USAA, and I have to agree with the convenience of the Deposit@Home program. There are times that you do get checks here and there. Sometimes it’s just inconvenient having to mail in or go directly into a branch, and even more so going thru the drive-thru at the banks (lines get long, people get inpatient, and sometimes we don’t have time to go to the bank during regular business hours). With Deposits@Home, there are no lines & it’s available 24 hours a day. How much more convenient can it be? USAA offers so many great products and services (and I’m not just saying it because I work there). When I served in the Navy, I banked with them. I could have gone with Navy Federal, but I chose USAA because I trust them. So, bottom line: if you think you may qualify for USAA membership, I would highly recommend their services. They have an array of financial products for whatever your needs are.

  13. Charlie Says:

    I’m stationed overseas, and whenever my pay sections screws up and send money to my government credit card (As the always do) BOA sends me a check so being able to deposit online vice mailing the check back across the water is nice. Both of my kids also have stock and to help them understand money, I have their divdine checks mailed to us them seeing how the process works is alot easier than trying to explain how they end up with more money in their savings account. USAA is an awesome bank, I’m glad a switched so many years ago.

  14. Marc Hedlund Says:

    Hey, Charlie, that’s great to hear. I’ve been really happy with them for a long time, and I’m glad they’re that useful.

    Thanks for the comment.

  15. katie Says:

    Hi, This is Katie and I work at USAA. I’d be happy to put you in touch with someone at the bank, or perhaps I can answer any additional questions you have about USAA or Deposit@Home. It’s a great product, definitely first of its kind for consumers.

  16. Chris Says:

    Hi Katie,

    Can you help with a few questions I have on Deposit@Home, please?

    Technically, how is the image processed? Is it via an IRD, ARC, ACH, or other method?
    Are you working with a particular vendor for this? Who?
    Fraud would seem like a concern … how is this being addressed?

    I think this is a truly innovative service tailored specifically for USAA’s members that prefer to do business online. What a terrific way to stay ahead of the customer service game!

  17. Mercedes Says:

    Hi Katie –

    “USAAs setup allows you to use your own scanner (if you don’t have one, they’ll give you a gift certificate to purchase one).”

    Is this true? I already have a checking account with your bank, but don’t have a scanner.

    Thank you for any information you can provide.

  18. Sherri Says:

    I just used Deposit@Home for the first time today and I love it! Both my husband and I have direct deposit, but I am off work on Work comp for a month, so 75% of my base salary is paid by the insurer. The program is very easy to use, the prompts are clear and concise, and your funds show immediately in your available balance.

    I love USAA (banking, insurance, and investments), and this makes an already great experience even better.

  19. Lorraine Says:

    There is an aspect to this deposit process that everyone seems to be omitting in their desire for convieniece. The safety issue. With identity theft so prevalent, the question has to be asked: What happens to the check after it is scanned, and how does the account holder of the check KNOW their personal and account information is secure? No one requires the checks to be returned or forwarded to the bank from what I understand; therefore, there is no accountability to the person presenting you with the check. I, for one, would not want my check laying around someone’s house or thrown into their trash. The children, visitors, or any number of others would have access to my information if they came upon my check in someone else’s home. If the check is thrown away without being shredded, it suddenly becomes available to people who are less than honest and actually looks for information like this in order to steal from honest, hard working individuals that work hard for a living to have what little they get. Not to mention that I have seen many papers flying out of many garbage trucks going down the road.

    So, where is the accountability to the owner of the checking account from which the check was issued? Who will guarantee the privacy and protection of idenity and account information? I truly hope they have a solution for this very serious flaw in their new “service”, which I believe to be more of a “disservice” to the customer. We have to keep clearly in our minds that sometimes the cost of ‘convenience’ is too high, and not really convenient at all. I will now be very cautious as to whom I will issue one of my checks!

  20. Eric Says:

    I also work at USAA, and would also be glad to answer some of the above questions.

    Yes, you can use your own scanner (no special equipment needed).

    No, the paper document does not need to be sent to the bank or anything like that. After the Deposit@Home software on the website accepts the scanned image, you are instructed to destroy the check.

    There aren’t any third-party vendors involved. Software on USAA’s website (http://www.usaa.com) walks the user through the process of scanning the front and the back of the check and gives immediate confirmation once it is scanned. The deposit is (in most cases) immediately added to the bank account as available funds.

    As far as security, USAA has the best possible security on the internet and I have never heard of any past security breeches, although evey bank these days has to deal with some type of security threat.

    Lorraine, you are concerned about what someone would do with the check after it’s scanned and deposited, and I would say that this is a valid concern. Our customers are instructed to destroy the check immediately but I acknowledge that some may just get tossed in the trash. I would argue that USAA’s adoption of Deposit@Home does not really make you any less secure. Anyone you write a check to (merchant, individual, etc) has ample opportunity to lose your check, leave it out in the open, write down your accounts numbers for fraudulent use, etc… so there are always risks present in the use of paper checks. My advice to you: don’t write a check to anyone that you don’t trust. Regardless of that individuals use or non-use of USAA’s Deposit@Home service, you are trusting that individual or merchant to safe-guard your personal information. Maybe choose another form of payment. I personally never write checks at yard sales for this reason. And with the ease of CheckCards, why write checks at all?

    As a plug for USAA Banking, and a good segue to another topic, USAA Bank customers can also pay anyone in the world using USAA’s Web BillPay option which is also a free service. In addition to that, if there are external accounts (other banks or credit unions) that a USAA bank customer needs to transfer funds to or from on a regular basis, this can also be done for free on USAA’s website. So again, why write checks?

    I am an employee and a member of USAA and I will check back to see if I can answer questions. I don’t personally work in the Banking division of USAA, but I should still be able to answer questions.

  21. BretB Says:

    Not sure if you guys are aware, nor why USAA would make such a ridiculous requirement, but if you do not have a CREDIT “and” an INSURANCE product through them, they will NOT allow you to do deposit@home.

    They bank is in San Antonio, TX and I live in Cincinnati, OH and cannot use the service. Therefore, the bank would rather pay $ .39 for each post paid envelope that I need to use to mail them a deposit rather than make the service available to everyone with a USAA number.

    I’ve complained about this to them, and they’re always very concerned with customer satisfaction, but I really just want a “sane” explanation for WHAT in the WORLD ‘insurance’ has to do with the method at which they offer me to make a deposit. I’m really struggling to draw the relationship. I know companies makes some TOTALLY STUPID decisions sometimes…

    … but this one TAKES THE CAKE!

  22. BretB Says:

    Oh…

    PS- I’ve been a USAA member for over 10 years, but have not served in the military. This is why I don’t even have an option of purchasing insurance through USAA, which I would like to do if they’d allow me (that also assumes their rate are competitive with Allstate).

    I have my retirement accounts spread throughout Ameritrade, AmeritradePLUS, and Fidelity, because USAA charges a ridiculous amount for mutual fund transaction fees. I also have life insurance policies through Northwestern Mutual. I’d love to be able to combine all my financial/insurance products with them, but they are only “the best” on certain products and on others, they ONLY offer those products to active miltary, or their immediate families.

  23. Eric Says:

    BretB:

    The reason that you cannot use Deposit@Home is that you are not eligible for USAA. The eligibility guidelines for the bank are now the same as insurance with USAA. Since you established the bank accounts with USAA prior to the eligibility guidelines changing, you are able to keep them, however your lack of true USAA eligibility (military or parents that are USAA eligible) is preventing you from using Deposit@Home.

    Truth be told, eligible members don’t have to have an active insurance policy to use Deposit@Home, they just need to be eligible USAA members that can also qualify for any one credit product with USAA (credit card, auto loan, anything).

    I apologize for your inconvenience, but as you pointed out USAA does provide you with postage-paid envelopes to mail your deposits in, plus having direct deposit for your income is always free. Also, if you deposit your funds at a local bank you can transfer them for free on usaa.com and in most cases the transfer is credited to your account immediately.

  24. Bill Says:

    I’ve been researching this product and I have one question. After you scan your check, do you then cut and paste the image into a separate email to send to USAA, or, is there some kind of function within the user interface that accomplishes this automatically?

  25. Sherri Cruz Says:

    Bill, it is simple to use. Enter the amount of the deposit. Scan the front of the check, crop, scan the back, crop, hit submit and you get a confirmation. No need to cut and paste or email anything. Even my husband, who is lost on a computer, can do it.

  26. Phyllis Says:

    how is usaa processing the check to the bank the check is drawn against

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