August 23, 2013
Canadian banks can move ahead with image cheque deposit
Canadians will soon be able to use their smartphones to deposit a paper cheque into their bank accounts thanks to changes in the legal requirements for such transactions.
The Image Rule Project was a five-year initiative aimed at enabling Canadian financial institutions and their clients to exchange payment items, such as cheques, electronically. Remote deposit capture has been common in the United States for several years but not in Canada.
Financial institutions will need to create their own infrastructure and smartphone apps to enable the feature to be used widely but the Canadian Payment Association rules finalized last week now allow it in Canada. Some credit unions have already started offering cheque imaging deposit.
The advantage is two-fold — consumers can now deposit cheques instantly using their smartphone rather than at the branch or ATM. For the banks it eliminates the expense of delivering the cheques physically to a clearing facility.
Cheque hold periods will still apply; an amount will be held and a re-charge arrangement will protect against fraud.