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What is remote deposit capture?
Remote deposit capture (RDC) allows customers to scan checks and make bank deposits remotely. This usually takes place via an encrypted internet connection.
RDC streamlines the deposit process, cuts costs for financial institutions and enables banks to attract new customers. Remote deposit capture works by digitally scanning paper checks and uploading an image of the check to the customer’s bank.
While RDC was initially only available to those who had a scanner, it is now widely available to anyone with a smartphone. Customers can deposit checks at any hour and any day of the week.
Most RDC customers are businesses that are looking to reduce the cost of transporting deposits to their bank and access the funds quicker. While the funds from paper checks are generally available within five business days of the deposit, the funds from RDC checks are often available within one to two business days.
The images used to upload checks must meet certain requirements. For example, they can’t be blurry, cannot exceed a certain file size and must have a minimum number of dots per inch (DPI).
Banks also have the right not to accept certain types of checks, such as traveler’s checks and checks made out to someone other than the account holder.
Remote deposit capture began with the Check Clearing for the 21st Century Act, approved in 2004. This legislation allowed substitute checks to be considered the legal equivalent of originals.
Remote deposit capture example
Ann runs a graphic design firm. While several of her clients pay her electronically, some still pay by check.
Ann pays her bank $15 per month to use their RDC service. In exchange for the monthly fee, her bank provides Ann with a scanner, with which she can scan and securely send the images to her bank for deposit. This eliminates the need for Ann to go to the bank and make the deposits in person.
Want to learn more about banking security? Learn how to protect yourself from check fraud.