Forms of RDC
Remote Deposit capture can be roughly divided into three categories: Dedicated high-volume for businesses; dedicated low-volume for businesses; and mobile for microbusinesses and consumers. While all fundamentally the same in principle, the important difference is in the equipment and software used for each.
High-volume RDC is exactly what it sounds like, and is loosely defined as Remote Deposit Capture involving hundreds and thousands of cheques per day. It uses a dedicated “horseshoe” scanner with a multi-feed input and automatic scanning at anywhere from 50-165 documents per minute (DPM). Indeed the main distinguishing factor between it and other forms of business RDC is the point at which the user experience of inserting cheques into a scanner one at a time becomes too tedious to justify using a cheaper single-feed device. When possible, it is recommended to use a client installed software program for high-volume Remote Deposit Capture, rather than a cloud-based service. This is because, when scanning a large batch of cheques at 50 or 100 DPM and up, the response time of an online service becomes a bottleneck, as it cannot keep up with the speed of scanning. It is best to have the option to scan offline and upload cheques all at once in a batch.
Low-volume dedicated RDC is essentially the same as high-volume, except that a less expensive single-feed scanner is used instead. This is typically employed by businesses receiving more than a few but less than 50 cheques par day, at which point an auto-feed scanner becomes more practical. Cloud-based services are suited well for this type of Remote Deposit, as the time it takes to insert and remove a cheque is easily enough time for it to be transmitted and processed.
For a more detailed discussion of scanner speeds and when an auto-feed scanner becomes preferable to a single-feed machine, see Digital Check’s related white paper Deconstructing the Scanner Wars on our Resources page.
Mobile RDC is mostly suitable for those who receive cheques infrequently; no more than a few per day. The capture speed of up to a minute per item is much slower than using a dedicated scanner, although the obvious benefit is that it is free with no up-front equipment costs. An additional point of consideration for the bank is that cheques captured by dedicated cheque scanners will have magnetic MICR data attached; whereas those captured by flatbed scanners or mobile devices are images only and the MICR is not read. For this reason, image quality takes on added importance, and some types of alterations and forgeries may be more difficult to spot.
In general, the first two types of RDC above are intended as paid services for businesses – who are willing to pay for both the service and the scanner because of the significant time and cost savings they realise. Although a few banks have experimented with fees for Mobile RDC, it is typically free and the main benefits to the bank are customer satisfaction and reduced processing costs.
Front Counter vs Back Office Scanning
One dilemma faced by banks under image-based clearing is where the cheques should be scanned. Some choose to do the scanning right at the teller window or counter; others perform the process at the branch back counter; some even transport all the cheques in a local region to operations centres for centralised processing.
What are the advantages and disadvantages of each?
Starting with teller capture, the obvious advantage is that it allows scanning to take place while the customer is present, which can be very helpful in clearing up mistakes before they make it into the processing queue. Furthermore, it’s been shown that scanning cheques in person works as an effective fraud deterrent – especially in countries where UV security is used – as the perception of having to defeat a machine in addition to a manual inspection gives many criminals pause.
The major disadvantage of teller capture is the higher equipment cost: Purchasing a separate scanner for each teller position is more expensive than installing one larger device per branch. It also takes marginally more employee time than branch capture, as cheques are processed in a series of small runs – banks report that 99% of teller window transactions involve six items or less – instead of one large batch. However, with the work distributed throughout the day in teller capture, there is no “end of day rush” to clear hundreds of items. This can result in better funds availability for the customer and eliminate an operational bottleneck for the bank.
Finally, with teller capture, the scanner operators (the tellers themselves) tend to be less trained and therefore less adept at spotting potential problems, whether image quality issues or outright fraud, than are specialised operations personnel.