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Remote deposit capture (RDC) is a service offered by banks that allows bank clients to remotely post and clear bank checks by sending a scanned image of the check via a secure Internet connection from their office or home without having to physically travel to the bank. The only requirements are a desktop scanner, an Internet connection and a banking service that supports the RDC system.
Techopedia Explains Remote Deposit Capture
Remote deposit capture became legal in the United States because of the Check Clearing for the 21st Century Act (Check 21 Act) of 2004, which was intended to keep the country’s financial machine going even in the event that transit to the premises of a financial institution becomes near impossible, as in the case of an attack or natural catastrophe. Before this act, clients and even financial institutions themselves had to physically exchange checks before they can be cleared, but the act has made it legal to exchange digital images of checks instead.
The process involves a scanner (one that is specifically designed for the purpose and usually provided by the bank on loan or for sale), an Internet connection and a subscription to the service. The special check scanners are made to handle multiple check scans and are often used only for businesses that handle a lot of checks and are in need of a fast solution, whereas home users and individuals may use common desktop scanners. The service is often done through a client-side software installation that is tied directly to the check scanner for businesses, whereas individual clients can upload the check image to the page of the bank’s website specifically designed for RDC.
RDC has the following advantages:
- Saves money and time, especially for businesses that need to spend employee work hours or hire a courier to carry out check deposits
- Offers physical security since it can be argued that accidents can happen on the way to the bank
- Has later cut-off times
- Recognizes bounced checks quickly
- Eliminates float, which is the time between the issuance of the check and the subtraction of the amount from the issuer’s account
