On Tuesday, Cachet Financial Solutions announced that it would be working with Nitro Mobile Solutions to provide mobile deposit solutions that use remote deposit capture (RDC) technology.
RDC is a process in which funds from checks can be deposited into bank accounts without the bank having the check itself. An image of the check is scanned and transmitted to the bank. With image scanning technology and optical character recognition, software can capture information off the check.
The Check Clearing for the 21st Century Act (Check 21) went into effect in 2004, making it possible for banks to engage in ‘check truncation.’ According to the Federal Financial Institution Examination Council (FFIEC), this process allows images of checks to be used during check collection and return instead of originals of the checks. These images are then submitted to the check-clearing network.
Image via Shutterstock
Images have to meet various requirements to be legally processed. These include having a magnetic ink character recognition (MICR) line, being an accurate representation of the original check and having the text: "This is a legal copy of your check. You can use it the same way you would use the original check.”
Minneapolis-based Cachet Financial Solutions, Inc. develops RDC solutions. These are offered to financial institutions like banks or credit unions, and then used by merchants, consumers and other financial solutions.
Tampa, Fla.-based Nitro Mobile Solutions, LLC develops mobile banking solutions for financial institutions that they can rebrand with their logos, messages and look-and-feel and promotions. Nitro claims that solution is so simple from the financial institution’s perspective that anyone who can update a Facebook (News - Alert) page should be able to make changes to mobile solutions.
The solution that the two firms developed is called Nitro Mobile Deposit. The solution is a combination of an existing Nitro mobile app with the image processing that Cachet developed. The solution also has security features to prevent transactions from ‘jail-broken’ or ‘Android (News - Alert)-rooted’ phones.
The benefits of the combined solution from Nitro and Cachet are very critical. In addition to simple convenience, RDC would allow funds to be deposited if the user could not get to the bank in time or if access was cut off as it would be from a natural disaster. It’s likely to be another nail in the proverbial coffin of in-person banking.
Edited by Alisen Downey
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