Deposit Check by Pic
When a federal regulation called Check 21 went into effect in 2004, banks gained the ability to process check images instead of the paper checks themselves. They could scan the check and create a legal copy (called a substitute check), which could be electronically sent to the paying bank…Deposits via smartphone first became available in 2009, and over the next few years, more and more banks started offering this feature.
When you take a photo of a check..[a] patented scanning service to get[s] the crucial information (like the check number, plus the account and routing number for the paying bank). (source: https://www.simple.com/blog/an-inside-look-at-photo-check-deposit)
More on the technical process: It’s be done via OCR (Optical Character Recognition), the same tech that we use to make the digitized newspaper issues full-text searchable. Yep, but MICR (Magnetic Ink Character Recognition) for the special ink on checks and ICR (Intelligent Character Recognition) for handwriting recognition is also used to enhance security. (Source: https://www.cujournal.com/opinion/how-to-create-an-online-check-deposit-solution)
More on OCR: OCR looks at each line of the image and attempts to determine if the black and white dots represent a particular letter or number. OCR was actually developed originally to assist sight-impaired individuals gain access to printed information. (source: http://www.legalscans.com/ocr.html)
Some History
Timeline:
- 1981: New York City Banks Test At-Home Banking
- This meant over the phone (https://www.investopedia.com/terms/h/home-banking.asp)
- 1983: Bank of Scotland Institutes First UK Internet Banking Services
- 1994: Stanford Federal Credit Union Offers U.S. Internet Banking
- 1996: NetBank Is Founded
- 1999: Bank of Internet USA Is Founded
- 2001: Bank of America Has 3 Million Online Customers
- 2006: 80% of US Banks Offer Internet Banking
- 2009: Ally Bank Is Launched
- 2010: Online Banking Is Growing Faster Than the Internet
- 2018: Online Banking Is Standard Practice
Security? Glad you asked.
Banks use SSL (Secure Socket Layer) to protect information sent and received via the internet while backing.
History of Online Banking: https://www.gobankingrates.com/banking/banks/history-online-banking/
One More Thing- Direct Deposit
Technically known as Automated Clearing House (ACH), it is:
an electronic funds-transfer system run by the National Automated Clearing House Association (NACHA)
The money is available quicker (sometimes as quickly as same day) and cheaper than traditional deposits. It’s used so much that it’s estimated that 90% of electronic transactions are ACH ones.
(Source: https://www.investopedia.com/terms/a/ach.asp)
One Last Thing (for real this time)
Here’s an article on the Zell banking Amy was talking about: https://www.theverge.com/2017/9/8/16270238/zelle-app-payment-service-us-banks-venmo-competitor
Food for Thought
National Online Banking Day is the second Monday in October (It’s the 14th in 2019). Ally Bank started it in 2015 to celebrate it’s 1 millionth customer.
https://nationaldaycalendar.com/national-online-bank-day/
