Imagine that Check 21 paves the way for remote deposit
By Francine Edmunds
A few clicks and a zap right at your desk is all it takes today for a business to make a funds deposit, thanks to the power of computers and a law called Check 21. From her computer, a business manager can now scan a stack of checks, review images, confirm dollar amounts and then electronically send the images to the company’s bank. The bank then routes them for deposit. Within seconds, the customer can view deposit information online and in a few days take action on any notification of returned items.
Welcome to the 21st century!
In a nutshell, Check 21, officially called Check Clearing for the 21st Century Act, allows printed versions of check images to act as legal substitutes for original checks. Check images are sent to any location in the country to be printed and the receiving endpoint accepts them just like they would the original check, thus speeding up clearing times and ending trips to the bank to deposit checks.
Outside the office you may have noticed Check 21 in your personal life without giving it a second thought. Your checks clear faster now, and you no longer receive a stack of your original paper checks back from the bank after they’ve been processed.
Now, you can view electronic images of your checks online. These changes may seem subtle, yet Check 21 opened the door for future technology improvements and enhancements in financial services. Now, businesses are beginning to see the advantages of new services such as remote deposit that Check 21 has made possible.
Companies improve cash flow by eliminating transportation costs and delays caused by the check-clearing system, especially when a merchant’s bank accounts reside in several locations nationwide.
New remote deposit services are designed to vastly simplify treasury and accounting functions. Companies that take advantage of Check 21 could immediately give themselves a competitive advantage.
You no longer have to make trips to the bank for deposits. Deposits can be made anytime, anywhere. You no longer need a physical banking store in your area to make a deposit. Deposits can be made later in the day up to 7 p.m. Pacific time which means additional checks can be deposited the same day. Also, fraud can be minimized as notice of returned checks has the potential to arrive faster, thus allowing the business to act faster if there is suspicious account activity. Overall cash management becomes more efficient thanks to online reporting capabilities of the service.
Business owners and managers who are considering remote deposit should ask their financial services provider if their deposit solution requires third-party software or if it is Internet based.
The advantage of an Internet-based service is it’s easy to set up and doesn’t require downloaded software and technology resources. With an Internet-based service, upgrades and enhancements are instant and can be accessed simultaneously in all offices. With a software-based service, every upgrade or enhancement requires yet another download of information and potentially more technology support.
While remote deposit once sounded like a futuristic idea, it’s now an account management reality that will help businesses save time and money and will simplify the lives of consumers.
Francine Edmunds is a business banking relationship manager with Wells Fargo in Madison. She can be contacted at (608) 833-3841.