Article

2007: A year of ATM check imaging

Image check clearing is here, but a standard spec is needed.

October 8, 2007 by Tracy Kitten — Editor, AMC

Dan Gruber and Peter Kulik are both ATM experts for Fifth Third Processing Solutions. Gruber, the channel manager for ATM products and services, focuses on the delivery of new ATM products. He has 27 years of industry experience in banking and EFT operations, project management and new-product development. Kulik, new technologies channel manager, is a regular trade-press contributor and industry-conference speaker. He has 21 years of experience in the ATM and banking industries. To submit a comment about this commentary, please contact the editor,Tracy Kitten.

Media reports and market researchers agree - image check clearing has arrived, and 2007 may be the tipping pointfor adoption.

 

Image check clearing at ATMs has many benefits, including:

• Reduced transportation cost
• Reduced paper check storage costs
• Lower clearing costs
• Geography is no longer a factor in clearing time
• Increased float income

The infrastructure is now in place to accept a check deposit at an ATM, capture the image and clear the image end-to-end - truncating the paper check at the ATM. The so-called "envelope-free" deposit also promises to eliminate empty envelope fraud.

 

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But will it play in Peoria? Just because we, as ATM deployers, can clear ATM check deposits end-to-end using imaging, should we?

 

To answer those questions, many financial institutions have been piloting different approaches and products for image check deposit on their ATMs. Most seem to be accepting "envelope-free" deposits, displaying and printing the image of the deposited check on the receipt. Consumer response to this approach has been favorable, and the ATM is the only deposit channel today that allows a consumer to obtain a copy of the deposited check at the time of deposit.

 

But many FIs are finding that "envelope-free" deposit by itself is not enough to drive return on the investment in hardware and software required to capture check images at an ATM. True return on investment will be realized by reducing or eliminating transportation costs, by truncating paper checks at the ATM and clearing the image end-to-end.

 

The return on investment will be most attractive for remote deposit ATMs, those serviced by armored car providers to pick up paper checks on a daily basis. With image check deposit and end-to-end clearing, armored car providers can pick up checks as part of a cash replenishment run; the resulting savings also promise to make remote deposit viable at more off-premises ATMs.

 

Fifth Third Processing Solutions is working with several of its processing customers to pilot and implement check image deposit and end-to-end clearing using the ImageMark Agent with NCR Aptra Edge ATMs - accepting, transmitting, posting and adjusting check deposits using images throughout. The goal of eliminating daily ATM runs to pick up paper checks has been accomplished, and quicker adjustment times for keying errors also has been realized. This approach has also reduced the risk of check fraud through quicker notification of returned items. And, of course, no more envelopes.

 

There are other software solutions that exist today for image check clearing, but it is our belief that the market is being held back due to the lack of a standard, open specification for the interfaces for sending check images from an ATM to a check image consolidation point.

 

A standard interface specification, freely shared in the public domain and implemented on ATMs from all ATM vendors will benefit consumers, FIs, processors and ATM vendors, by accelerating adoption of check image deposit at ATMs across the industry.