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Deposit paper checks via iPhone

Could smart phones make bank tellers obsolete?

By MSN Money Aug 13, 2009 1:11PM

Is there anything an iPhone can't do, except perhaps scrub the toilet (near the toilet bowl is not where you want your phone to be) or take out the trash?


And now, we have to wonder, could smart phones make bank tellers obsolete? (You've seen tellers from time to time, haven't you? Always helpful and smiling despite standing all day long for horrible wages.)


A privately owned bank that has one brick-and-mortar branch but serves mostly U.S. military members around the world has debuted a new feature of its iPhone app that allows customers to deposit paper checks electronically.


You photograph both sides of the check "and once you hit the send button, that image is going into our deposit-taking system as any other check would," Wayne Peacock, a USAA executive vice president, told The New York Times. At that point, you can void the check and shred it.


Many have heralded this advance. Chris Ziegler of engadget wrote, "The problem with banks, you see, is that they're one of the few remaining weak links in our ultimate goal of eliminating all human interaction. ... Fortunately, USAA ... is helping to close that loop with its Deposit@Mobile service."

It makes sense. Smart phones are already serving as personal shopping assistants, so why not take the place of bank tellers too?


Truth is, somehow that seems a bit sad (which probably makes us a dinosaur). We enjoy visits to our local bank after, for instance, people pay for our pet-sitting service with a paper check. It's like visiting Cheers, without the beer tap.

But having real people at our beck and call is costly to banks.


For instance, Nick Holland, a senior analyst with Aite Group, told the NYT, "If banks can get people to stop calling call centers for mundane inquiries and instead send a text message, that saves a bank about $14 for every one of those inquiries."


Is e-deposit of paper checks safe? We figure more people would be using mobile banking if it weren't for security concerns, well-founded or not, and Adriana Lee wonders at PhoneDog about possible pitfalls. USAA, which is also an insurance company, has been an e-banking leader, permitting customers to deposit scanned paper checks from home for three years. To hedge against fraud, the check-deposit service -- which will be extended to other phones -- is limited to those who are both USAA banking and insurance customers.


"We'll see how this goes," said John Brownlee at "It'll either be a lesson in massive fraud or one bold step

toward the 21st century we were all promised."




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