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Remote Deposit Capture

Remote Deposit Capture, in its most simple terms, is a service which allows a user to scan checks and transmit the scanned images and / or ACH-data to a bank for posting and clearing. The basic requirements for an RDC service currently include a PC, an internet connection, a check scanner and the SwipeNow RDC service. Checks you receive at your corporate or bank location can be scanned to create a digital deposit. This digital deposit is then transmitted (usually over an encrypted internet connection) to your bank who then accepts the deposit, posts the deposit to your account and assigns availability based upon your availability schedule.

Remote Deposit Capture often has different names depending upon how the service is applied within a particular environment. These names include "Corporate Capture", "Merchant Capture", "Image Deposits", "Image Cash Letters", etc. In general, we see the term "Remote Deposit Capture" increasingly used as the catch-all phrase for a family of related products and services. Each of these service family members are related in 1 common way: The service allows for checks to be truncated and cleared electronically.
Recent legislation in the USA commonly referred to as "Check 21" makes this entire process possible. Passed in October 2003 and implemented in October 2004, this legislation allows banks to clear checks based upon images of the original items, instead of having to transport the original check all the way back to the paying bank for clearing. The benefits of RDC can be substantial: convenience, reduced transportation risk & cost, better availability, processing efficiencies, the ability to consolidate banking relationships and more.

The Remote Deposit Capture Process

Depending upon functionality and degree of incorporation into your corporate or bank operations, the RDC process can range from extremely basic to becoming a part of your automated receivables processing platform. In its most basic application, here is an example from a corporate perspective:

  • ABC Corporation receives payments by check in the mail or at their office.
  • ABC Corp. performs their normal Remittance Processing process. This process includes opening the mail, data entry from the payment coupon / control document (application, form, invoice, etc.), data entry from the check (dollar amount, date, account number, etc.), and information uploads to the Accounts Receivables, Customer, and other databases.
  • Checks are then typically provided to the corporation's treasury area where ABC Corp. prepares a deposit (deposit ticket with total and accompanying checks). This process typically includes counting the number of checks and adding the value of checks at least twice to ensure the deposit is accurate and balanced.
  • With Remote Deposit Capture, instead of physically going to the bank to deposit the checks, ABC Corp. can now scan the deposit ticket and checks using a desktop scanner.
  • Once the check images are captured, an ACH file (for eligible items) and/or an image-based deposit is prepared. The RDC system can then transmit (usually via FTP over the internet as a 128-bit encrypted file) the deposit to ABC Corp's bank.

    • The Bank receives the ACH file and / or image deposit, posts to ABC Corp's account and assigns availability based upon an agreed upon availability schedule.

The Benefits of Remote Deposit Capture

Accelerated Clearings

The Remote Deposit Capture service offered allow corporations to capture deposits in their office / processing center, branch, etc and can eliminate the need for the checks to be transported to the bank. This reduction of the transportation time from the total processing lifecycle of a check provides a longer time for the corporation to process the checks. Often, this additional processing time allows the corporation to deposit more items at an earlier cutoff time than they otherwise would.

Improved Availability

Closely related to accelerated clearings, Improved Availability results from the ability to now make deposits earlier in the day. Most large banks offer availability schedules which vary depending upon time of deposit. The earlier a corporation can make the deposit at the bank, the better an availability schedule can be assigned to that deposit because the bank now has more time to process and clear the items.

Enhanced Cash Flow from Cash Management Operations

Accelerated clearings and improved availability result in improved cash-flow and working capital for your corporation.

Reduced Return Item Risk

This one is quite simple: The faster an item clears, the faster you'll learn about return items.

Reduced Transportation Costs / Convenience

Now that full truncation of checks is possible, substantial savings can be had from reductions in transportation expenses. We say "reduction" because there will be items which may be unsuitable and unable to be processed via Remote Deposit Capture, and therefore must still be deposited in paper form at a bank. The vast majority of items (99.5%+) will be able to be captured. Assuming your corporation previously had daily couriers depositing items, Remote Deposit Capture allows you to reduce your transportation needs substantially. Your corporation may now choose to utilize that courier now only once per week for the (very) few items which need to go to the bank in paper form an 80% reduction in transportation!

Reduced Processing Costs

At a minimum, a corporation can save time and money by using a Remote Deposit Capture solution to eliminate: the time and expense of traveling to the bank, and the time spent balancing the deposit & associated keying. Additional benefits can be had by using a Remote Deposit Capture solution as both your remittance processing, and you financial transaction processing platform. The new check 21 legislation and new technologies allows for the convergence of these traditionally separate functions (Remittance Processing & Treasury Deposit Functions).