After a rough year that saw its momentum slow somewhat, remote deposit capture could be poised for faster growth as banks and non-bank companies move into consumer and small-business markets, according to a new report. Indeed, growth rates for remote capture, a technology that allows businesses and individuals to deposit paper checks electronically in an office or at home, could soar if new mobile-banking services proliferate. “The cell-phone idea longer term is a way to make self-service deposits available to the masses,” Bob Meara, author of the report and a senior analyst at Boston-based researcher Celent LLC, tells Digital Transactions News.
Already, USAA Bank has enjoyed remarkable success with a remote-capture service it launched in August and based on Apple Inc.’s iPhone. In the first week after its introduction, the service took in $7 million in deposits, USAA reported. And Bank Of America Corp. is reportedly planning to launch later this year its own handset-based service for remote capture. With mobile remote capture, the customer uses his phone to snap pictures of the front and back of a check, then uses an application on the phone to send the images to his bank.
The service is in its infancy, and Meara notes that after a year in which banks have seen technology budgets ravaged by the recession, few financial institutions “have the stomach for it now.” But as more banks, particularly big ones like BofA, get involved, others will follows as a defensive measure, he says. “It’s hard to imagine opposition to mobile [remote deposit capture],” he says. “With a bank [like BofA] entering the mix, the adoption interest is going to grow.”
Helping to fuel adoption by both financial institutions and users will be a lessening of concern about fraud and security. Banks have limited consumer-based remote capture to customers known to be low risk, and will probably do likewise with the handset version of the service. “It’s as secure as mobile banking, and some banks are letting you trade stocks over a mobile phone,” notes Meara.
Until now, remote capture for consumers and small businesses has relied on machines most businesses—and some consumers—already have, such as combination fax/copy/scan devices. This allows banks to offer the service without requiring customers to buy or lease specialized scanners, which can run hundreds of dollars. At first, many banking executives balked at the idea, preferring the ability of specialized scanners to read MICR lines on checks. But now such machines are commonly being harnessed for remote deposit. An August Celent survey showed that roughly half of financial institutions either had a product based on such scanners, were planning one, or were considering one. Through June, nearly 100 banks had already gone live with the service, Meara’s report says.
“Attitudes have changed over the past year,” says Meara. “A lot of banks said. ‘There ain’t no way I’m doing that,’ and now they’re singing a different tune.” The same change of mind, he says, is likely to happen with financial institutions that are wary of handset-based remote capture as banks fear the loss of deposits to rivals that are offering the service.
Overall, however, the pace of growth for remote capture—said by some to be the fastest-growing form of electronic payments ever introduced—slowed in the past year as banks reined in spending. While banks will have deployed 130,000 scanners this year, for an increase of 35% in the installed base to 463,300, that’s down significantly from the 161,000 installed in 2008. The number of financial institutions offering remote capture, however, saw strong growth this year, up 52% to 10,459.
Non-bank players, such as software vendors and independent sales organizations, will have accounted for another 42,000 devices for remote capture this year, for a total installed base of 505,275. The non-bank deployment this year is up from 29,000 in 2008 and 10,000 in 2007.
Remote deposit capture relies on electronic check-processing methods developed largely in the wake of the Check 21 law, which went into effect in 2004. The software currently works on the Nokia 6216 classic, which the Finnish handset maker introduced this spring as the first mobile phone with fully integrated NFC technology (Digital Transactions News, April 29). As other phones become available with NFC capability, Charge Anywhere may add the software to them, as well, says James Dugan, the company’s chief financial officer. Right now, “there’s just no BlackBerry NFC phones out there,” he says. The basic mobile-payments software currently works on BlackBerry devices as well as those using the J2ME, Windows Mobile, and Android operating systems. A version for Apple Inc.’s iPhone is in development, Dugan says.
Though Nokia seemed to stress markets outside North America when it launched the 6216, Dugan says conversations he’s had with Nokia officials indicate the handset maker will launch the device in the U.S. in the not too distant future.
The new software, which Charge Anywhere developed in-house and is currently in what Dugan calls a “beta” phase, is available to resellers for a price he says could come in under $100, depending on commitment levels. The printer/card swipe, available from Charge Anywhere, is another $199. He says there is no timeline to commercial rollout. “We don’t currently have orders,” Dugan says. “We’re still working with Nokia and are in the process of getting some pilots together.”
Charge Anywhere’s announcement followed by hours one by TSYS Acquiring Solutions for its new MobilePASS product, which likewise enables mobile merchants to process card payments and works wirelessly with a combination receipt printer/card swipe. Bob Philbin, president of the Tempe, Ariz.-based unit of Columbus, Ga.-based processor TSYS Inc., tells Digital Transactions News the company expects to introduce versions of the product that will let merchants process on their mobile phones a wide range of transactions, including loyalty points, automated clearing house payments, and prepaid payroll transactions. “We’re in the process of working out the kinks of that,” he says.
A consumer version of the application is also expected by the end of March, he says. While the company is mum about details, the app would let consumers perform transactions at the point of sale with their handsets without necessarily relying on NFC technology, says Ashim Banerjee, chief information officer at TSYS Acquiring Solutions.
The introduction of new versions of the app is facilitated by a new platform at TSYS Acquiring Solutions that makes use of a TSYS host, a middleware server from Infonox, a company TSYS acquired for $50 million nearly a year ago, and an application programming interface (API). “We’re looking at a comprehensive mobile-payments strategy,” says Banerjee.
The MobilePASS app differs from those already on the market in that it offers immediate usability for TSYS merchants, Banerjee says. A merchant can download the app after entering a merchant and terminal ID, and then “they can get started right off the bat as if we had shipped them a terminal,” Banerjee says. The app carries a setup fee, but since TSYS is selling the product through its network of acquirers, company officials won’t give pricing details. Banerjee calls it a “fairly nominal” fee. Susan Sheen, senior director of sales and marketing at TSYS Acquiring Solutions, says “the response rate is very favorable” from resellers.
Already this year, such applications have been launched by companies ranging from accounting-software giant Intuit Inc. to independent sales organization Merchant Warehouse, in addition to Charge Anywhere.
TSYS is clearly banking on the new product having a significant impact. On the assumption that 62% of consumer payments are currently electronic, with the balance on checks and cash, Philbin estimates the new product could push that electronic portion to 65% “in the near term,” and to more than 70% within three to five years.
Already, USAA Bank has enjoyed remarkable success with a remote-capture service it launched in August and based on Apple Inc.’s iPhone. In the first week after its introduction, the service took in $7 million in deposits, USAA reported. And Bank Of America Corp. is reportedly planning to launch later this year its own handset-based service for remote capture. With mobile remote capture, the customer uses his phone to snap pictures of the front and back of a check, then uses an application on the phone to send the images to his bank.
The service is in its infancy, and Meara notes that after a year in which banks have seen technology budgets ravaged by the recession, few financial institutions “have the stomach for it now.” But as more banks, particularly big ones like BofA, get involved, others will follows as a defensive measure, he says. “It’s hard to imagine opposition to mobile [remote deposit capture],” he says. “With a bank [like BofA] entering the mix, the adoption interest is going to grow.”
Helping to fuel adoption by both financial institutions and users will be a lessening of concern about fraud and security. Banks have limited consumer-based remote capture to customers known to be low risk, and will probably do likewise with the handset version of the service. “It’s as secure as mobile banking, and some banks are letting you trade stocks over a mobile phone,” notes Meara.
Until now, remote capture for consumers and small businesses has relied on machines most businesses—and some consumers—already have, such as combination fax/copy/scan devices. This allows banks to offer the service without requiring customers to buy or lease specialized scanners, which can run hundreds of dollars. At first, many banking executives balked at the idea, preferring the ability of specialized scanners to read MICR lines on checks. But now such machines are commonly being harnessed for remote deposit. An August Celent survey showed that roughly half of financial institutions either had a product based on such scanners, were planning one, or were considering one. Through June, nearly 100 banks had already gone live with the service, Meara’s report says.
“Attitudes have changed over the past year,” says Meara. “A lot of banks said. ‘There ain’t no way I’m doing that,’ and now they’re singing a different tune.” The same change of mind, he says, is likely to happen with financial institutions that are wary of handset-based remote capture as banks fear the loss of deposits to rivals that are offering the service.
Overall, however, the pace of growth for remote capture—said by some to be the fastest-growing form of electronic payments ever introduced—slowed in the past year as banks reined in spending. While banks will have deployed 130,000 scanners this year, for an increase of 35% in the installed base to 463,300, that’s down significantly from the 161,000 installed in 2008. The number of financial institutions offering remote capture, however, saw strong growth this year, up 52% to 10,459.
Non-bank players, such as software vendors and independent sales organizations, will have accounted for another 42,000 devices for remote capture this year, for a total installed base of 505,275. The non-bank deployment this year is up from 29,000 in 2008 and 10,000 in 2007.
Remote deposit capture relies on electronic check-processing methods developed largely in the wake of the Check 21 law, which went into effect in 2004. The software currently works on the Nokia 6216 classic, which the Finnish handset maker introduced this spring as the first mobile phone with fully integrated NFC technology (Digital Transactions News, April 29). As other phones become available with NFC capability, Charge Anywhere may add the software to them, as well, says James Dugan, the company’s chief financial officer. Right now, “there’s just no BlackBerry NFC phones out there,” he says. The basic mobile-payments software currently works on BlackBerry devices as well as those using the J2ME, Windows Mobile, and Android operating systems. A version for Apple Inc.’s iPhone is in development, Dugan says.
Though Nokia seemed to stress markets outside North America when it launched the 6216, Dugan says conversations he’s had with Nokia officials indicate the handset maker will launch the device in the U.S. in the not too distant future.
The new software, which Charge Anywhere developed in-house and is currently in what Dugan calls a “beta” phase, is available to resellers for a price he says could come in under $100, depending on commitment levels. The printer/card swipe, available from Charge Anywhere, is another $199. He says there is no timeline to commercial rollout. “We don’t currently have orders,” Dugan says. “We’re still working with Nokia and are in the process of getting some pilots together.”
Charge Anywhere’s announcement followed by hours one by TSYS Acquiring Solutions for its new MobilePASS product, which likewise enables mobile merchants to process card payments and works wirelessly with a combination receipt printer/card swipe. Bob Philbin, president of the Tempe, Ariz.-based unit of Columbus, Ga.-based processor TSYS Inc., tells Digital Transactions News the company expects to introduce versions of the product that will let merchants process on their mobile phones a wide range of transactions, including loyalty points, automated clearing house payments, and prepaid payroll transactions. “We’re in the process of working out the kinks of that,” he says.
A consumer version of the application is also expected by the end of March, he says. While the company is mum about details, the app would let consumers perform transactions at the point of sale with their handsets without necessarily relying on NFC technology, says Ashim Banerjee, chief information officer at TSYS Acquiring Solutions.
The introduction of new versions of the app is facilitated by a new platform at TSYS Acquiring Solutions that makes use of a TSYS host, a middleware server from Infonox, a company TSYS acquired for $50 million nearly a year ago, and an application programming interface (API). “We’re looking at a comprehensive mobile-payments strategy,” says Banerjee.
The MobilePASS app differs from those already on the market in that it offers immediate usability for TSYS merchants, Banerjee says. A merchant can download the app after entering a merchant and terminal ID, and then “they can get started right off the bat as if we had shipped them a terminal,” Banerjee says. The app carries a setup fee, but since TSYS is selling the product through its network of acquirers, company officials won’t give pricing details. Banerjee calls it a “fairly nominal” fee. Susan Sheen, senior director of sales and marketing at TSYS Acquiring Solutions, says “the response rate is very favorable” from resellers.
Already this year, such applications have been launched by companies ranging from accounting-software giant Intuit Inc. to independent sales organization Merchant Warehouse, in addition to Charge Anywhere.
TSYS is clearly banking on the new product having a significant impact. On the assumption that 62% of consumer payments are currently electronic, with the balance on checks and cash, Philbin estimates the new product could push that electronic portion to 65% “in the near term,” and to more than 70% within three to five years.
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