Author: Milton King, MKing@profitstars.com
While check volume has decreased in the past few years, nearly everyone sees the decrease slowing. Why is that? A few reasons come to mind:
- The FI industry has shrunk to a point where it is pausing, and the volumes are too.
- After finding themselves with unwanted debt, consumers are now a bit credit card weary and are reverting back to traditional means like cash and checks.
- The third, and most intriguing, is that the technology people thought would be the demise of checks may actually be saving checks. A few examples:
- Image ATM - the Image (advanced function) ATM has made check deposits a simple process that is available 24 hours a day. This is good for the consumer and the bank/credit union. The proverbial “win-win!” Customer acceptance is up and so is deployment.
- Mobile Phone Capture - Can you think of a more convenient way to capture an image of a check? I can't! This takes convenience a step further than the ATM as it eliminates going to the branch.
- At-Home Capture or, as I like to call it, the Pajama Branch. This is particularly attractive to the small, mobile business.
- Merchant Capture – Now merchants can accept checks and get immediate feedback on the status of the check and deposit it to their bank. This mitigates the risk associated with checks and gets the money deposited quickly! Two important advantages for a merchant. It also delivers features of the debit card, but with the control of a check.
What do these technological factors all have in common? They all take away the inconvenience of a check. We see that our banking and credit union clients that have seen a steadying (or in some cases an increase) in check volumes all have one or more of these services available to their customers.
The consumer is getting the best of both worlds. They get the security and stability of traditional check-based transactions while also taking advantage of the best in modern technology. No wonder the adoption rates have exceeded expectations.
As more institutions embrace these technologies, it will be interesting to see if technology ultimately saves the check instead of eliminating it.
Your Chance to Speak
What has been the experience at your FI? Any trends, differences…or surprises?