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Mobile deposit services spread

By David McMillin ·
Friday, September 30, 2011
Posted: 3 pm ET

Some small banks are wising up to smartphone check deposits.

This week, First Tennessee Bank unveiled a new service that lets its checking account holders deposit paper checks via an iPhone. The service functions like other mobile deposit services you've probably seen. Simply take a picture with your iPhone, and send the image to the bank to deposit into your account.

For now, the service is free for all of the banks' checking account holders, but the bank will eventually charge all of its non-Premier Checking account customers 99 cents per check. The bank says it plans to develop the service for Android phones in the future.

On one hand, I think this type of announcement proves smaller banks can keep up with America’s biggest banks in terms of technological innovation and account features. On the other hand, I’m not sure if it really matters. Many banks -- big and small -- have begun requiring direct deposit in order to avoid monthly maintenance fees. As the number of account holders who arrange to have their paychecks electronically sent to them increases, is there a real need for mobile deposit? Also, in today's banking landscape, will customers really buy into another add-on service that adds more fees?

Security questions linger for some customers, too. A comment from a concerned customer on the Tennessee-based bank's Facebook announcement of the service highlighted the worry of data breaches over the mobile airwaves.

Mobile deposit is a convenient option for consumers, but I'm curious to see if the service will continue to spread across the entire banking industry. While some account holders enjoy the ability to bypass that trip to the teller or ATM, I think the potential for security flaws and more fees will make mobile deposit’s impact relatively small.

What do you think? Are you a "smart" depositor? Or is your phone not a piece of your personal finances?

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