10 Years After its Launch, Banks offering RDC Raise Per-item limits for Customers
Banks are now allowing customers to deposit larger amounts ten years after mobile captures came into play. It is like the financial institutions offering the service have finally realized that the benefits of this approach are far more than its risks.
RDC allows a customer to deposit checks by taking pictures of them via smartphones. The various institutions who offer this service have provided banking apps that allow customers them to send the images.
Certainly, as of last month, more than half were using per-item limits ranging from $2,001 to $5,000 in comparison to 49% of last year and 46% in 2017. These figures are from a new survey by RemoteDepositCapture.com, a research firm. It featured 105 banks.
And though 74% of the scrutinized firms still cap their limits at $5,000 or less, nearly 19% now have caps above $10,000, havecaps customized for each mobile depositor, orno caps at all, according to John Leekley, Founder and Chief executive ofRemoteDepositCapture. “And that number keeps growing,” he told Digital Transactions News.
Since RDC became commercially available for consumers, Banks have been imposing caps to mitigate the risk of counterfeitor phony items. Sometimesthe limits apply per month but you are most likely to find per-item limits.
According to Leekley, these financial Institutions werejust being cautious, it’s the most prudent thing to do. However, RDC has performed much better contrary to the expectations of many that; institutions risk losing more than gaining from the approach. The result; more and more institutions are now loosening up and setting higher limits. So far,checks are the type of payment that has recorded reduced levels of losses.
In fact, the Chief executive feels banks should get more confident than they are because better authentication tech like fingerprint recognition are becoming more popular withsmartphones.
“I’m still surprised that limitsare still quite low,” he says. “It’s disturbing how these limits haven’t gone up much faster. Biometrics gives you the power to verify the personmaking the deposit andscrutinize transactions off multiple risk-management databases.”
Though banks are slow to do away with per-item limits en bloc (only 4% have agreed, based on the recent research), an emerging trend has been to impose a limit tied to list of customers categorized by risk. And this trend may progress even farther. “We are looking at a revolution where each customer will be assigned a custom limit.” Says Leekley.
This poll has proven that; if a bank focuses more on RDC, it is more likely to set higher limits or try using custom limits on each customer. Banks that are still reluctant to try this method or those who try it with the risks in mind set the lowest limits.
Author Bio: As the FAM account executive, Michael Hollis has funded millions by using merchant cash advance solutions. His experience and extensive knowledge of the industry has made him finance expert at First American Merchant.