"It's really staggering the lack of fraudulent activity that's happening with mobile deposit and RDC in general," said Gary Brand, Director of Source Capture Solutions at payment processor Fiserv Inc. He cited research conducted by payment consultancy Celent LLC in 2012 that said financial institutions (FIs) reported no fraud losses uniquely attributed to RDC.
Brand said RDC and MDC fraud is "shockingly small" as the result of FIs adhering to know your customer (KYC) requirements, which make fraud more difficult to perpetrate. KYC for RDC include duplicate item detection, new account monitoring and suspicious activity alert capabilities.
"Fraud [on RDC] does happen, but it's very, very rare," Brand said. "And when it does, we as solution providers work with our financial institutions and help to come up with ways to mitigate that exposure even more."
Fiserv recently added same-day prepaid MDC capability to its Source Capture solution set. Prepaid Source Capture, delivered via Fiserv's Mobile Source Capture, is back-end technology that allows front-end users to deposit checks remotely and have those funds instantly available.
The new service, which is currently being marketed to prepaid program managers and processors, leverages Fiserv's RDC market share of over 3,600 FI clients and 1.2 million end-users. The company teamed with check guarantee provider Valid Systems Inc. to deliver the near real-time verification and instant funding service.
Brand said when a customer scans a check with a smart phone, Valid runs that check data through its verification engine, comprised of some 60,000 rules, to determine whether that check is good. Then that check value is returned to the consumer's mobile device, where the consumer is given the choice of paying a fee to have the funds deposited instantly into a prepaid account.
That instant funding capability figures to lift load amounts into accounts and increase the frequency of consumers using those accounts. Perhaps the main use case for this service is for unbanked employees; it allows them to forgo check cashing stores and deposit paychecks into prepaid accounts, with that money instantly available for use.
Brand sees other scenarios, too, where MDC increases the convenience factor, for example when teenagers receive checks for odd jobs or team sports administrators want to deposit checks from team members upon receipt, rather than gathering them over time and depositing them at the bank at the end of the month.
RDC in its different forms is proving to be a driver of positive change on both micro and macro levels, according to Brand. He said, "What happens when we start to implement RDC that's really fascinating is when the business is actually making that deposit, at their desk, from a scanner that's there, they're online with their financial institution, the quality of the deposits go up significantly."
Instead of business owners relying on the accounting acumen of bank tellers, RDC forces business owners themselves to take responsibility for the accuracy of deposits, Brand said.
On the macro scale, FIs can reduce overhead and reallocate resources when they implement RDC. "When you take the check function and you move it to the furthest endpoint, which is a consumer being able to do it in real time, instead of going to a branch, certain dynamics become inevitable," Brand said.
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