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Insider's report on payments "Mobility makes accepting checks so much easier," said
Gary Brand, Director of Source Solutions at banking
services firm Fiserv Inc. Fiserv offers several imaging and
Long live checks mobile solutions, including a remote deposit capture (RDC)
app that allows consumers to deposit check payments to
prepaid cards using a mobile device.
By Patti Murphy
ProScribes Inc. Brand said about 50 banks and credit unions are going live
with Fiserv's mobile RDC solutions every month. Financial
institutions offering the solution have signed more than 2
first met Paul H. Green in 1998, when he graciously million users in the past two years, Brand said during a
agreed to keynote a conference I was presenting on presentation at the 2013 RDC Summit, a yearly conference
the evolution of check payments from paper to elec- put on by RemoteDepositCapture.com.
I tronic. We were ahead of the times. Paul and I were
both convinced that checks were not going away – at least According to Brian Egan, Senior Vice President in the retail
not in our lifetimes. payments office at the Federal Reserve Bank of Atlanta, in
the nine years since enactment of the Check 21 Act (which
The prevailing sentiment then was that checks were gave legal accommodation to processing checks as images
fast becoming passé. After all, the Internet was gaining rather than paper), the Fed's check processing shop has
traction, credit card adoption had shot past 80 percent, and gone almost completely paperless.
debit cards (PIN- and signature-based) weren't far behind.
"Today 99.9 percent of the checks coming into us are in
"At some point in the not-too-distant future, the use electronic form," Egan said at the RDC Summit. But prior
of checks may begin to dwindle as electronic payment to 2004, when Check 21 took effect, the preponderance of
methods become less expensive and more accessible and checks cleared through the Fed as paper items.
familiar to consumers," Green said in his presentation (yes,
I still have a copy). "However, we must recognize that the An analysis by a group of economists at the Federal
volume of checks has grown by more in absolute numbers Reserve Bank of Philadelphia revealed that the Fed saves 7
during the last 20 years than all electronic payment cents every time it accepts a check presented electronically
methods combined." rather than as paper. That translated to $1.16 billion of
savings in 2010 alone, according to Getting Rid of Paper:
Paul and I weren't alone. There were other "believers" Savings from Check 21, a working paper published by the
in the longevity of checks, including several industry Philadelphia Fed in May 2012.
experts and Federal Reserve insiders. And initiatives were
underway – like check imaging and image exchanges – New products reach new customers
that were beginning to diminish the importance of paper
to the check system. And the benefits don't end there. New bank product
offerings like remote check deposit are slashing costs,
Now, 15 years later, the pool of believers has grown driving deposit growth and enabling banks to spot
exponentially. And credit card usage has fallen. The last fraudulent transactions more quickly.
Federal Reserve payments study, published in 2010,
indicated that 20 percent of noncash payments were made Brand and several other industry experts also made a
using credit cards in 2009, down from 23 percent in 2006. compelling case for bankers to leverage their expertise
in risk analysis and their customers' affinity for mobile
Meanwhile, the value of check payments continues to devices to support real-time check verification and
dwarf that of electronic payments. Checks represented guarantee services. After all, checks are laden with
44 percent of the total dollars paid out by Americans in valuable information that banks can use to assist with the
2009; credit cards were 3 percent and debit cards 2 percent, process. "This is a huge market," Brand said. "The numbers
according to the Fed. (An updated payments report, based are staggering."
on 2012 data, is due out by the end of 2013.)
The unbanked and underbanked total nearly 70 million
Electronic technologies help keep U.S. adults, according to the Federal Deposit Insurance
checks alive Corp.; many of these individuals use reloadable prepaid
debit cards in lieu of bank accounts. Surveys by the Fed
There are several reasons why checks continue to indicate members of this group are big users of mobile
dominate the payments space. Perhaps the most obvious is devices. In fact, for many, mobile devices are the only way
technology. Quite simply, imaging and mobile technologies they have of accessing the Internet.
are breathing new life into the check payment system.

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