Online deposit puts check cashing on the fast track

Ever-evolving Internet technology continues to level the business playing field, letting smaller businesses compete with larger enterprises in a growing number of arenas, including online banking. Remote check deposit, an Internet option offered at one time to large business account holders only, is among the services now offered by an increasing number of banks to merchants of all sizes.

As a result of the Federal Reserve's Check Clearing for the 21st Century Act of 2004, also known as Check 21, properly prepared electronic facsimiles of checks - called "substitute checks" - may be used as the legal equivalent of an original check for all purposes. For merchants, this means electronic check deposits are possible via the Internet and translates into fewer trips to the bank, extended "banking hours," and faster access to funds.

Customers are not significantly affected by the new technology, as their checks are handled in much the same way as before with one exception: checks deposited online may clear more quickly, lessening the "float" time - the time between the writing and the cashing of a check - a consumer may previously have enjoyed.

While many banks have offered remote check deposit service to large businesses throughout the past year, West Coast Bank was among the first Pacific Northwest banks to offer the technology to merchants of all sizes - including single-owner businesses. Additional banks in Lincoln County that offer remote check deposit technology include Bank of the West, U.S. Bank, and Wells Fargo; Oregon Coast Bank, TLC Federal Credit Union, Umpqua Bank and Washington Mutual do not yet offer the service. A representative from OSU Federal Credit Union did not respond to News-Times inquiries by presstime.

iDeposit online service

West Coast Bank offers remote check deposit service through iDeposit technology. To sign up, a merchant must have a personal computer with hi-speed "always-on" Internet access. The business owner purchases an iDeposit check scanning unit outright and pays an ongoing monthly maintenance fee.

Timothy Johnson, vice president and manager of coast commercial banking at West Coast Bank's uptown Newport branch, likened iDeposit to the revolution in banking brought about by ATMs (automated teller machines) "for consumers, so that people didn't have to go to the bank during banking hours," he said. "This will do the same for businesses."

In exchange for the initial cost and monthly fees, merchants can avoid closing up shop during business hours to make a mad dash to the bank in order to have check funds posted to their accounts before 5 p.m. iDeposit lets the merchant make check deposits as late as 7 p.m. Mondays through Fridays, with nearly instantaneous access to those funds at the time of deposit.

West Coast Bank offers three levels of iDeposit service, depending on the needs of the individual account. The smallest system is designed for a client processing 30 to 50 items per day, entered one at a time. For higher volume, the next model up includes a hopper that lets the merchant drop in 25 to 30 checks at a time for bulk processing; customers with even greater volume may opt for the largest system, which requires the purchase of additional software.

iDeposit lets merchants assign check preparing duties to shop clerks or other assistants, if desired, and also lets the business owner review and edit the "batch" of prepared checks before an electronic deposit is made.

"The system is very secure when minimized on someone's desktop - and an administrator at every site decides who gets access, who is assigned a user logon password," said Julia Dungey-Quintal, treasury management vice president at West Coast Bank. "Every user is tracked as to who sent which deposit when."

To prepare a deposit, the iDeposit check scanner make a substitute check by capturing images of the front and back of the check and electronically "franking" the check with a red stripe to denote it has been cashed. After saving the image, iDeposit makes an electronic version of the check - both front and back - that appears on the computer screen.

After the check is scanned, the remainder of the process takes place mostly in cyberspace, which lets the shop owner review prepared deposits from a location other than where the checks were prepared.

"Customers log onto the URL address we give to them to allow for scanning throughout the day," said Dungey-Quintal. "They can leave iDeposit open all day long, and can minimize it on the desktop. The software does all the things we do (at the branch) for the Federal Reserve, and actually sends the deposit back to us as images."

"The images are treated like regular checks, and kept at the Federal Reserve for serious kind of back up," if need be, Johnson added.

"When we transmit a batch, they have a record of it right then," said David Green, vice president and coast district manager of West Coast Bank's uptown Newport branch.

"That part hasn't changed, just the paper part," said Dungey-Quintal.

After the substitute checks have been forwarded through cyberspace to the Federal Reserve, the merchant keeps the original paper checks for 60 days to give "ample time for those images to clear and complete the cycle," Johnson noted. After that time, the paper checks may be shredded.

iDeposit can create paper printouts of substitute checks and cyber deposit slips, should the need arise; and also offers an information archive to let merchants track specific data about regular account holders over time, information that can be plotted onto a spreadsheet.

"At the same time you're creating a bank deposit, you're capturing data, information you need to compile about that client anyway," said Green. "It's not for everybody, and if it's not going to save you time or money, we're not going to let you buy it; but we know there will be certain clients out there who will see some pretty significant savings in time."

"As far as West Coast Bank, one of the things I tell every client I speak to is, this is not a message that we don't want to see you or don't want you in the bank," said Johnson.

"What if, though, you had the opportunity to spend that time you would have spent in line to make a deposit speaking with Tim, for example, about how you're going to make your business grow?" asked Green.

For more information about remote check deposit services, merchants are encouraged to speak with their personal banking representatives. For more information about iDeposit at West Coast Bank, contact Timothy Johnson at 574-1162.

What are people saying about mortgages today:

Rates on 30-year mortgages edged down last week to a seven-month low. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages fell to 6.3 percent, down slightly from 6.31 percent two weeks ago. It put rates at the lowest level since they were at 6.24 percent the first week of March.

Bank of Hawaii, Central Pacific Bank, Territorial Savings Bank and Wells Fargo Home Mortgages all cut their 30-year mortgage rates to 5.75 percent this week.

Most people think of a mortgage as a means to an end. After all, you buy a house, not a home loan. But a mortgage is much more than the path to homeownership. It is a financial instrument that must be managed, just like any other financial investment.