Remote check capture becoming an issue for banks
October 31, 2014

One of the major boons of mobile point of sale systems has been the use of a relatively new system of depositing checks. This feature, called remote check capture or check image depositing, allows retailers to accept check payments simply by taking a picture of the check through a smartphone camera. That saves a lot of time and some money from having make bank runs to deposit the checks received. However, there are still some problems with using this technology. For example, banks are becoming more wary of check images coming in that can't be deposited because of errors in the image itself.

Unforced errors
The main issue with remote deposit capture has been a belief that when an image is sent, retailers take for granted that it's been cleared, according to Digital Transactions. That presents a major problem for banks. Some checks simply don't clear because of issues on the check itself. There may be a few wet spots, some smudges and smears in the ink or the writing may be faint. The scanner or camera that created the image may have a weak resolution, creating a fuzzy image that misses details. Check image clearing is somewhat sensitive, and these little things can result in so-called critical image errors. These errors result in checks failing to settle, and require manual deposit by the banks that cost about $15 to $25 per check. They usually occur about 1 in every 1,000 checks, which is a lot given the number of checks that are deposited on a daily basis.

When inexperienced retailers conduct remote deposit capture for payments, that complicates matters further. If using a mobile POS, the likely situation is that retailers are simply taking a picture of the check on a table, rather than using a scanner or special equipment. With so many different variables in play, including the resolution of the mobile device's camera and the angle that the picture is taken from, there's a far greater chance of critical image errors from the check.

When conducting a remote deposit capture, retailers should take great care in making sure the check image works. For example, they should be able to have a policy in place that pictures must be taken as close to perpendicular as possible. The pictures should be taken in a well-lit space as well. Employees should be trained on properly taking a picture to ensure that mistakes aren't made and that the check clears.

Nexus: G-WEBCD3