Magazine article American Banker

B of A Set to Pilot Check Conversion for Deposits

Magazine article American Banker

B of A Set to Pilot Check Conversion for Deposits

Article excerpt

Bank of America Corp. is poised to begin testing a remote deposit service that will enable merchants to convert checks into electronic images and transmit them instead of carrying paper checks to a branch.

The service is based on the same image technology that some banks already use to settle and clear checks. "I would say this takes the idea a step further," said Peter Wheeler, a senior vice president of receipts product management at the Charlotte-based company.

Though the Check Clearing for the 21st Century Act, which became law last month and will take effect next October, is expected to facilitate the widespread exchange of images among banks, some see the type of service B of A will test as an interim, evolutionary step. When merchants use it, checks will enter the system much sooner, and in electronic format.

This remote deposit service is the type of innovative image applications that many observers expect to enter the financial services industry in the near future, taking advantage of technologies that allow for improved efficiencies, new revenue-creating services, or both. Mr. Wheeler said he does not know of any bank offering anything like it, but "I wouldn't be surprised if there are other banks working on it," he said. "This will be a time when a lot of change is going on in the industry."

Mr. Wheeler said it is envisioned as an alternative to hand-delivering bundles of checks and will appeal to merchants because it can accelerate the deposit and settling process. Some business owners go to the bank only every few days, he noted, but this will allow them to deposit, almost instantly, every check they receive. More importantly, he said, they will get their money sooner.

Starting Dec. 1, B of A will test this system with Kohner Properties Inc., a property management company in St. Louis. Ten scanning devices will capture check images and send them to the bank as automated clearing house transactions or electronic checks in digital format. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.