Busy people who use smartphones to check their bank balances, transfer funds and pay bills have a new reason to bypass banks and ATMs: They can use their phones to deposit checks.
Earlier this month, JPMorgan Chase (JPM) updated its iPhone app to letl customers electronically deposit checks. To make a deposit, customers photograph the front and back of the check with the phone's built-in camera, then transmit the image to their account.
USAA has offered a deposit app since last August and says customers have used it to deposit 1.5 million checks worth more than $900 million. USAA's app is also available on the Android, says USAA spokesman Paul Berry.
Bank of America(BAC) has tested a mobile deposit app but hasn't set a date to launch it, spokeswoman Tara Burke says.
USAA, which serves members of the military and their families, had a strong incentive to offer the mobile deposit: It has only one branch, in San Antonio. Customers outside San Antonio can use other banks' ATMs for cash withdrawals, but in the past, the only way to deposit checks was by mail.
Chase customers don't have that problem: They can deposit checks at any of the bank's 1,500 branches or at 15,700 ATMs. The bank's decision to offer mobile deposit reflects customer demand, spokesman Tom Kelly says. "We know some iPhone users are passionate about using their iPhones for anything possible, and we are happy to help," he says.
Chase's decision to offer mobile deposit will force other financial institutions to seriously consider offering their own deposit app, says Bob Meara, senior analyst with Celent, a research firm. Because of it's non-traditional structure, "a lot of banks were dismissive of USAA," Meara says. "They can't be dismissive of Chase."
While ATMs let bank customers deposit checks without waiting in line at a bank branch, "you've still got to find an ATM and stop somewhere," Meara says. With mobile banking, he says, "you take two or three minutes and make the check go away."
The innovation comes at a time when check use is declining. Between 2007 and 2009, the number of checks handled by the Federal Reserve fell 14%. The Fed processes about a third of the USA's checks.
Still, even the most tech-savvy consumers sometimes need to deposit paper checks. Daniel O'Leary, 27, of Long Beach, Calif., uses USAA's app to deposit checks he receives from his grandparents on his birthday. His grandparents are in their 80s, he says, "and they're not going to use PayPal," an online payment service.
O'Leary, a content manager for a software company, says he'd use the deposit app even if USAA had a branch in his area. "Going to the bank," he says, "is not a fun experience."