Mobile banking expands to making deposits by smartphone


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He doesn't have a jet pack, but Julian Figgins does have technology that was only dreamed of a few years ago, and it helps him do his chores faster.

When Figgins has a check to deposit, the West Sacramento resident doesn't lumber to the nearest bank. Instead, he snaps a picture of the check with his smartphone, taps the screen a few times, and the check is deposited to his account.

"I've deposited a personal check, a rebate check from AT&T, and an escrow overage check from my mortgage company," said Figgins, a Golden 1 customer who uses the new mobile deposit application. "It makes the deposit so much easier. I just take a picture, and avoid driving to the bank. There's no filling out slips or taking checks in, and it saves on gas."

Mobile deposit is one of the newest additions to mobile banking suites, with a handful of banks nationwide rolling it out recently. In the greater Sacramento area, Chase, U.S. Bank and Golden 1 Credit Union offer a mobile deposit application in tandem with their mobile banking services.

A study recently released by the market research firm comScore found that 30.8 million people nationwide accessed their bank accounts via mobile devices in April 2011 alone, up from 26.7 million for all of 2010.

While more financial institutions add mobile deposits and educate customers, industry members foresee expansion of mobile deposits for more devices, including tablets such as iPads.

Customers at these institutions can download an application for their mobile device, typically free of charge. When they need to deposit a check, they log on to their bank accounts via the app on a mobile device, select the deposit function, key in the amount and take a snapshot of both sides of an endorsed check with the device's camera.

Figgins has been using Golden 1's mobile banking app on his iPhone for more than a year. He started to use mobile deposit about a month ago.

"I can make a deposit even if the bank is closed, or when it's convenient for me," he said. "I can make deposits from home, and I've even done it from bed."

Figgins said it's a bonus that the app is free from the Apple store.

Financial institutions are weighing security concerns about mobile check deposits against the ease and efficiency for customers, and the cost savings of scaled-down branch operations. If the success of the new technology so far is any indication, more banks will offer the app in coming months.

Out of Golden 1's 600,000 members, 250,000 have signed up for online banking services, which allow customers to check and manage accounts from a computer, said Donna Bland, chief executive officer for the credit union. About 65,000 members are enrolled in its mobile banking program, which allows them to use a mobile device to manage accounts.

Since the institution launched the mobile deposit app in November, 12,000 members have signed up, Bland said. The app is offered to iPhone, BlackBerry and Android device users.

"Once they try it, we believe members will be hooked," she said. "It's extremely convenient, fast and free. Everyone's always busy these days, we're on the go, and need to multi-task. We don't always have the time to sit at a PC."

Bland said the credit union is one of a few smaller independent institutions offering mobile bank deposits. The app is helping to grow the credit union, building on a nationwide shift away from corporate banks, while controlling personnel costs at branches, she said.

"Projections show us that the number of smartphones will outnumber PCs in the next few years, so we expect our online banking customers will become mobile depositors," Bland said, adding that many already use the institution's online bill paying or person-to-person payment services.

Niti Badarinath, director of mobile banking at U.S. Bank, would not disclose the number of customers using the bank's mobile check deposit service, but he said he was surprised at the rapid growth in adoption among customers, and the dollar amounts of checks being deposited.

The bank rolled out mobile deposits in the first quarter of 2011, initially serving the iPhone, and eventually launching apps for BlackBerry and Android devices. Badarinath said that by December 2011, more deposits were being made by mobile devices than by desktop computers, and the amounts are as high as checks being deposited by desktop.

"We thought people would tend to use their phone camera for smaller checks," he said. "I think this points to a rising comfort level. Instead of $60 or $70 checks, they're using their phones to deposit checks for hundreds, even thousands of dollars."

Chase Bank was one of the pioneers of the technology, launching it in 2010, one year after it was first introduced by USAA Federal Savings. Today, Chase is the largest bank to offer mobile deposits.

Eileen Leveckis, a spokesperson for JPMorgan Chase, said the bank's QuickDeposit feature is extremely popular with customers and "figures prominently" in the bank's marketing strategy.

Badarinath said checks deposited by mobile devices have a 99 percent acceptance rate. Most rejections occur because of shadows on the image, wrinkled checks or duplicate deposits made when customers don't believe they did it correctly.

Badarinath predicts that mobile deposit technology will spread to tablets with cameras, such as iPads. Image-capturing technology will continue to take the place of paper-based payments. In the future, customers may be able to take a picture of a bill, then a check to pay that bill. People may also be able to pay taxes with mobile devices, Badarinath said.

And a host of other banking and financial applications are becoming available for mobile devices.

The Square service uses a small card-reading device that attaches to smartphones to allow the phones to accept credit card payments. The company says it already has signed on a million small and medium-size businesses.

A number of companies, including Google and Isis, a consortium of cell phone companies, are developing mobile payment systems that allow consumers to pay at retailers simply by waving or tapping their cell phones on a sensor. A small number of phones and large retailers already use the systems.



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