Well, the last contact with checks was, IIRC, in the 80's when I saw my mother occasionally using them and they were being phased out at the time already. This was in Europe. So, I don't think any technology to have to do with checks can ever be considered progress.
As someone from Europe that clunky check-based system of the US is simply dumbfounding. What exactly is the purpose of it? Is there no e-banking available? Over here people rarely even use banks, as in physical entities, anymore.
I had some friends in college that had a roommate on an exchange program from Norway, and when they explained to him that we used the moral equivalent of IOUs scribbled on sheets of paper to do a majority of our finance, he thought they must have been making fun of him (as in, telling him things about the US that are false so that he'll make a fool out of himself; to be clear: they did not do that to him).
We draw our names in functionally illegible ways on legal documents as authentication, even though we've known it's a broken system for hundreds of years.
Part of the problem is that checks became "free" some years ago but all other alternatives charge fees. Rent is one of the biggest demands for checks, as most landlords don't want to pay Visa or Mastercard (or Paypal or Square or Mint) a percentage of thousands of dollars a month.
Part of the problem is that checks became "free" some years ago but all other alternatives charge fees.
What economic force keeps the checks "free" and charge fees on the more efficient solutions?
Checks were phased out here exactly because it's expensive and labor-intensive to process checks instead of wire transfers that have been automated for decades. It's the same reason nobody goes to a physical bank anymore (except old people): it costs a lot to do anything over the counter, be it withdrawing cash, paying bills, or... cashing checks :) You can do that free over internet. Usage of cash is going down as well but I think cash is fundamental enough that it will never disappear, though.
Wire transfers are free here and can be initiated thru internet banking and be completed the following banking day. Before internet, we had wire transfer machines, similar to ATMs. Debit cards don't cost anything either (some banks charge a yearly fee, similarly to some credit cards). It would probably cost tens of euros to cash a check here, and rightly so given the amount of labour.
Wire transfers are good. You can even buy from internet shops without a credit/debit card if they support a scheme where you make a verified wire transfer through your bank's internet service, and many shops do. The shops get online verification from my internet bank that the wire transfer has been made, so the payment is completed immediately and the shops just ship you the good.
I feel like this comment was missing the punchline; are you saying that in other countries (where, at least in Norway, apparently even rent is not paid with IOUs scribbled on sheets of paper) checks cost as much as bank transfers, or that bank transfers are free?
(Also, FWIW, in many countries in Europe two-factor authentication is incredibly common, if not expected or even legally required; it is my understanding from some business deals I was a part of that Germany, in particular, is quite the stickler on this front.)
Cheques are not secure. One well known scam is to order something (imagine for £2000), then overpay by cheque (say £10000). You call the seller, and explain the mistake. You say "Wait for the cheque to clear. When you have the funds could you transfer the extra money (£8000) to our account / bank transfer / etc?". The victim assumes that once the cheque has cleared the money is theirs and it's legit, they don't realise that a bank can (and will) claw-back the money from forged cheques.
The victim is down the product, and £8000.
The scammer has the product, and £8000. And because they used other means of money tranfer there's no way of getting the money back.
This is now the second comment I have received on this thread that somehow seems to feel the need to point out that checks are insecure, when in fact a) that is obvious and b) I personally abhore checks (and thereby need no convincing of their ineptitude), and refuse to use them for anything I have control over (including paying contractors: if you require me to send you a check you will not be hired). I am highly confused by this, as my contribution to this thread was "funny anecdote that backs up someone else's comment about how people outside the US realize checks are stupid".
Signature forging has been an ignored issue for ages.
In the US, most banks will subsidize the $15-ish for a box of checks out of the interest earned from the money in your account. Likewise, paying the payee is also subsidized by the interest you don't receive. So Americans see checks as a way to move money without fees.
Check fraud is still a big issue, and I'm very surprised that no other payment processing company has figured out how to hide fees from customers in unpaid interest.
Again: you are preaching to the choir about checks not being secure; I personally refuse to use them for numerous reasons, this being one (others include the variable delay, the risk of losing the slip, and the increased paperwork due to having to file 1099-MISC).
As for an alternative payment processing company that supports transferring money for free: if you use your PayPal balance to transfer money for a purpose that cannot be disputed (such as "I admit that I owe Bob money, and this is my payback"), they do the transfer for free.
Checks are the precursors to debit cards (aka check cards) - you can carry them around instead of cash. They just became so widespread that they're still in use today - which is not surprising, seeing as half of the population got used to them since they were young.
They're actually just as effective as a wire or a credit card, except the recipient has to go through more hoops to get the cash...
I like USAA's iPhone (or scanner) check deposit. You have to have a credit card or a loan with them, but when you submit a check, you instantly get the money. However, you also have to write a little note with your account number on the back of each check, which could be a pain if you had a stack of checks.
USAA is great. I used to deposit with a crappy android phone, and it would fail half the time, but since I got the iPhone 4S it has not failed once. I'm sure it's related to image quality. USAA has a $5K limit per day, and you can log in with just a PIN. Their service in general is awesome, and the phone deposit is very convenient.
You can't get a credit card, loan, or insurance product (and by extension, remote deposit access) without a "military connection". I really wish the breathless USAA cheerleaders that come out of the woodwork all over the Internet every time there is a banking thread would remember to mention this.
I'm having trouble getting a reference to USAAs current eligibility information, because their website is a mess of badly named links and what Google finds redirects me to their homepage, but as I understand it pretty much everything under their banking umbrella is now available to everyone, including the credit card and loan stuff, and with it, remote deposit access. That said these breathless USAA cheerleaders should try having actual contentions with them sometime, it's a pretty poor experience reminiscent of news stories you hear about BoA and similar
I've been a USAA customer since 1999 and have always had great customer service from them. The most recent instance was about a year ago or so I had several charges I didn't recognize for a few hundred bucks each hit my checking account one morning. They were all for perfume and shoe stores in the UK (I was living in FL at the time). It took about 5 minutes on the phone to get the charges removed and a new card on the way.
Loans and by extension remote deposit all require a military connection, like I said. (It turns out anyone can get a credit card, which unfortunately is not 'enough' for RD)
"Deposit@Mobile® using your iPhone®, iPad® or Android™ device. Available to qualified members.2,3"
2: 2 You must qualify for USAA's Deposit@Home® and Deposit@Mobile®; eligibility for USAA property and casualty insurance and credit qualification required. Deposits may not be available for immediate withdrawal. (3 is a trademark disclosure.)
Okay, so you have to be eligible for USAA property and casualty insurance. How do you do that?
"You must have a USAA checking or savings account and:
Have an active USAA property and casualty insurance policy and be qualified for a USAA loan or credit card (not a USAA Secured Card).
OR
Be eligible for USAA property and casualty insurance and have an active USAA loan or credit card (not a USAA Secured Card)."
So, you must have or be eligible for insurance. How are you eligible for insurance?
USAA's iPhone check deposit works great. It take about two minutes total to take the photos and submit a check – and have the balance available in my account. The one time I mistyped a number took a 10-minute call to resolve. USAA's website and app could use some UI improvements, but the functionality is there.
On the other hand... I use an online-only bank (Ally) that hasn't enabled phone deposits yet. I've found the Chase app to be pretty lenient about what it accepts (except for the $2k/day limit). I tried to switch to USAA but found out only vets can use the phone deposit.
The Chase phone deposit app is so convenient for me, even given that I live in NYC where I pass 5 Chase ATMs per day, that I keep an account open with a minimum in it to avoid fees, just so I can use the phone deposit app.
Yes, the ATM deposit might be more convenient, when there are no lines, and the ATM isn't broken, and when I actually have a Chase ATM card, which I don't because I don't use them as my regular bank. If you're trying to min/max your banking experience then the Chase app is pretty nice to use as a funnel for money to other accounts.
Weird. I called to cancel and specifically told them that was the only reason. I would have thought if there was a way they could enable it for me they would have to keep a customer.
Of course, I tried to deposit a check via the Chase app while I was typing this and it failed for the first time ever for me.
I completely disagree. I absolutely love digital deposits. Unfortunately I have Bank of America who is incredibly slow at implementing this but I use the same feature on the PayPal app as a way to get around not having it with BOA. I've seriously considered switching to Chase just for this feature. I hate going to the bank. PayPal limits you to $1,000 a month which is pretty annoying but is still way better than nothing. It's nice to have when you get checks for a few hundred dollars and it's not worth going to the bank for. I've never had one check rejected. I just really wish BOA would implement this already.
When you have the check, it's true, sometimes photo deposits are less convenient. But if all you have is an image of the check, it's awesome.
Say I wanted to send money to my sister. Before this I had to actually mail a check, or worse, pay for a wire transfer. Now I can just send an image of a check via email, and she'll have access to the money before a mailed check would have arrived.
No third party brokers the transaction, and nobody extorts any fees (be they for postage, sending the wire, or receiving the wire).
The trick is to use this to enable things that just aren't possible at the bank branch or ATM.
This experience sounds specific to the "PC Deposit" implementation by Chase and if it's how they have educated their customer like the author, I am worried:
1. A check never "clears" the same day. The check may post the same day but they take at-least 3 business days to clear. This is because all checks I am aware of use the ACH in the U.S.
2. You are never supposed to "destroy the paper check". Most institutions recommend you hold onto it for at-least 90 days.
3. It's really a challenge to OCR a check photographed by a iPhone unless the lighting conditions are absolutely perfect. Hence, it's better to ask the customer to use a scanner if that's available, but if not, only then suggest using a phone camera.
I almost exclusively use Alliant and DCU for my check depositing needs and am yet to have any issues. They do require me to use a scanner for best results, but scanning a check takes me less than a minute and I am able to import it into GNUCash as well.
Neither do I have to obsessively check if my deposits cleared, I get emails automatically about the status.
I will never go back to an ATM, unless "I need money now" and there are no places around that will take plastic.
Photo deposits is part of the future I want to be part of: I want to be part of a future where regular banking is done online allowing me to focus my time on things I like better.
PayPal will have this same photo check deposits soon. Also fun fact, your PayPal account is actually a Chase bank account. Read the back of your PayPal card. I frequently go to Chase to withdraw money from PayPal with no fee and no wait time.
In regards to him having trouble scanning checks with Chase: that sounds like a problem with Chase's implementation, not the technology as a whole.
I have been using USAA's online service as my only form of check deposit for 5 years (started with flatbed scanner, now iphone). I have never had a check refused. Hundreds of them have gone through (have to re-take the photos sometimes, but they always eventually work). It works, and it works really well.
> You like ATM deposits? That's great. Other people
> prefer digital deposits.
I think that you're missing the point of the article. The point of the article is that it's supposed to be 'the future,' but the experience is horrible compared to the ATM. Just because it's 'on the iPhone' isn't enough to make it a better experience.
No, his experience was horrible. I've used the exact sane app for small miscellaneous deposits and haven't had 1/10 the problems Marco had. The Chase app isn't perfect, but it works in a pinch. If only we had his problem of not being able to deposit more than 5k/day...
I've used the Chase app for depositing a multitude of checks and after the first two or three times I got down exactly how it wanted me to take the picture and it was extremely easy and convenient. I haven't had a check that wasn't accepted.
After that I've kept the checks in an envelope after writing (cashed) on the back so that I know they were deposited.
The convenience and ease of use is fantastic. I really wish my other bank (ING Direct) would support something similar.
Alternative experience: I've deposited about 60 checks lifetime through the app over the last year or so, and literally had it fail twice the first few times I used it, then they updated it and it has only failed once since. So I mean, ~57/60 successes on first try, and 100% overall success ain't bad. I LOVE this app (and generally hate Chase otherwise...)
I think this is kind of a ridiculous claim. I have deposited checks twice with PNC Bank's app and both times it took only a minute or two to complete and I didn't even have to leave the house. Neither were rejected. Just because Marco's bank's iPhone app sucks doesn't mean that the technology isn't there. Marco better than anyone should know that it is.
i have similar feature with smaller credit union. similar steps involved, but their tool is just more thought through and somehow their app able to recognize bad shot and ask to redo one. so far it was easiest way to deposit for me.
tl;dr; this is bad implementation, not idea/technology.
Well, the last contact with checks was, IIRC, in the 80's when I saw my mother occasionally using them and they were being phased out at the time already. This was in Europe. So, I don't think any technology to have to do with checks can ever be considered progress.