Many area banks now offer remote deposit

It's five o' clock, time to close up shop and run to the bank-right? Not necessarily. A relatively new and popular service from area banks is bringing an end to this well-established routine. Most people have heard of direct deposit, but have you heard of remote deposit?

Here's how it works: your bank installs a small scanner (about the size of a toaster) at your place of business. At the end of the day (or whenever you feel like it), you scan your customers' checks and the day's receipts are automatically posted to your account.

Northwestern Bank has been using remote deposit since February.

"It's like having a bank right at your desktop," says marketing director Doug Zernow.

The remote deposit system was made possible by a dramatic change in banking laws in 2003. The Check 21 Act gave digital copies of checks the same legal and financial weight as hard copies. For example, if a disaster or other circumstance made travel impossible, funds could still be transferred between banks.

Under the old system, banks had to physically deliver checks to other banks in order to get paid. With remote deposit, once the check is scanned, a substitute check is presented to the paying bank while the original deposit is automatically posted to the customer's account.

Huntington Bank has been offering remote deposit since the Check 21 Act was passed. More than 300 businesses now use remote deposit in the bank's five-state footprint.

"With remote deposit there's some extra employee security because someone doesn't have to bring a bag of money to the bank at the end of the day," says Kathie Alford, vice president of treasury sales.

Electronic transfer also allows businesses to get their money faster.

"With the use of checks, credit cards and debit cards, businesses hardly see cash anymore," says First Community Bank Vice President Walter Muellenhagen. "Remote deposit gives them faster availability to their funds."

Larger companies throughout the country were quick to adopt remote deposit, but an increasing number of smaller firms are now taking advantage of the convenience of the service. "People love it because it saves time, saves gas and speeds up the collection of money," says Doug Wolf, president of Chase Bank Traverse City, which has dozens of business customers using remote deposit.

Northland Food & Family Center of Kalkaska has seen an immediate benefit of remote deposit.

"We've been using the service for about a month now, and we love it," says office manager Amy Faber. "Being a grocery store, a lot of customers pay by check and now we don't have to run to the bank by six o' clock each night."

John Melcher, vice president of Treasury Management at Fifth Third, describes the electronic deposit as simple technology that has changed the way people make deposits. Fifth Third has been promoting the product for about a year and a half. Over 1,000 small to large businesses in the bank's Midwest footprint use the technology. "It's our most popular product right now," he said. "It's interesting…it helps businesses that are far away from us, but also people who are right across the street."

To get the word out, the bank is doing seminars and demonstrating the scanner in business offices.

"People are surprised just how simple it is," Melcher said.

Fifth Third customers can purchase or rent the product. Most of Fifth Third's customers purchase the scanner, which costs $1,600 and includes a maintenance package.

"We affectionately refer to it as ED (for electronic deposit). Others call it the 'toaster.' Customers will call in and say 'I'd like to buy the toaster…but not the one that toasts bread."

While some banks are moving forward with electronic technology, others are banking on more personal services. In 2001, Traverse City State Bank began offering a courier service for deposits.

"This service is a unique offering to our business customers," says Onlee Bowden, who handles public relations and marketing for the bank. "We pick up deposits at your place of business absolutely free."

Currently approximately150 businesses in Grand Traverse, Leelanau, and Antrim Counties are using the courier service. BN