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PayPal drops mobile check deposit

By Allison Ross · Bankrate.com
Wednesday, June 18, 2014
Posted: 2 pm ET

More and more banks continue to add mobile check deposit features, but payment service PayPal is going the opposite direction.

© littleny/Shutterstock.comPayPal on June 12 stopped offering the check capture capability to people downloading its PayPal Here app, according to PayPal. Three days later, it stopped allowing current users of the app to deposit checks into their PayPal accounts by taking a picture of the check with their phones.

The discontinuation goes against the grain of the trend in financial services right now.

Mobile remote deposit capture is the "most sought-after mobile banking feature" among consumers, according to a 2013 survey by ath Power Consulting, a financial services research and strategy firm.

Banks are responding to the demand. A study by RemoteDepositCapture.com found that 63 percent of banks offer remote deposit capture, and another 33 percent plan to offer it in the next year.

Indeed, earlier this month, Citizens Bank announced it was launching a mobile check deposits function.

But PayPal, which has had mobile check deposit for several years now, says that "checks have become a less common way to pay for things and many of our customers have either fully moved away from checks or have other ways to pay."

It adds that the discontinuation of mobile check deposit "allows us to focus on our primary mission, creating a truly digital economy -– whether shopping online, paying a friend, or using a mobile device to pay."

Security concerns

Indeed, the use of paper checks has been falling for several years.

Still, mobile check deposit is continuing to grow, and it's prompting questions about fraud and double-cashing of checks.

What do you think of PayPal's decision?

Follow me on twitter for more: @allisonsross.

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14 Comments
Jd
July 27, 2014 at 1:45 am

Really disappointed with paypal at the moment

Rick
July 23, 2014 at 4:07 pm

I'm very disappointed in their decision to take a step backward. I still get old school checks for reimbursement and other payments and I would take this "non payroll" funds and put it into my Paypal account as a slush fun/fun money. Well if I want to do that now, I've got to deposit to my checking acct and then do a transfer. that takes about 2 weeks to process....

Bad decision, bad initiative, bad move all around.

Amber
July 16, 2014 at 4:38 pm

I'm so upset. I last deposited a check June 16th and couldn't understand where the link went today. Now I have to mail my checks to the bank?? LAME. If my bank doesn't go digital I may switch to a bank that allows check capture. Frustrating.

Darla
July 02, 2014 at 4:18 pm

If it ain't broke don't fix it!! Just disable it!

Darla
July 02, 2014 at 4:17 pm

I didn't receive any notice! I am very disappointed in PayPal as of late. This was the most useful feature that they had available for small business' and now it's gone. If aunt broke don't fix it, just disable it.

Johnny
July 02, 2014 at 1:23 pm

I'm totally dependent on check capture. With it's demise my life just got more complex and I'll seldom have a reason to use Paypal. ...and with no notice?

Ron
June 24, 2014 at 1:33 pm

Most of my payments are still by check. Check Scan was the deciding factor in using Paypal. I will be switching to Flint. Cheaper transactions and you can ditch your scanner. With Flint,you simply take a picture of the card and the funds are deposited directly into you bank account, unlike paypay.

Chris
June 21, 2014 at 2:39 pm

I have been using there mobile check deposit for a couple years now. I used it quite often when getting checks for work. It made it easier for me despite the issues they have had with it. I am upset that they have discontinued there use of it. I will be probably taking my business elsewhere.

Rachel
June 20, 2014 at 9:16 am

I too use the Pay Pal check capture often. I did receive an email and I was shocked that they would suddenly cancel such a great service. I am a busy Notary Public and often receive checks so this was an effective way for me to deposit. I really hope that they bring the feature back. Even American Express offers their "checking account alternative" which includes remote check capture. Dropping this service makes me think less of PayPal.

Yardi
June 19, 2014 at 9:17 pm

I just recently started using this feature, and have become dependent on it since I live in a rural area. Unlike other paypal customers I did not receive a notice that this feature will no longer be available it simply did not work, and I didn't find out why until two days later through a blog post. This seems ridiculously unprofessional.

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