Banco Sabadell is enhancing its mobile banking platform with the launch of Instant Check, which the Spanish bank claims is the first mobile remote deposit capture service in Europe.

Instant Check lets the bank’s customers make a deposit by taking a picture of a check with their mobile phone’s camera, eliminating the need to go to a bricks-and-mortar branch. The service is already available for several mobile platforms, including iPhone, Android, BlackBerry and Windows Phone 7.

“It seems to me self-evident that mobile remote deposit can deliver extraordinary customer convenience at significantly lower transaction costs than branch deposits to a large and growing market segment,” said Bob Meara, Marietta, GA-based senior analyst for the banking group at Celent. “What remains unclear is whether financial institutions will follow with appropriate branch-channel evolution to realize those efficiency gains.

“Prudent risk management invites financial institutions to place restrictions on mobile RDC eligibility and limits upon its use once enrolled,” he said. “Not everyone will want it and not everyone will qualify.

“We see mobile RDC, therefore, used as a ‘sweetener’ for select checking-account products rather than as a means to overtly seek fee revenue.”

Mobile RDC
Banco Sabadell’s application has a familiar look and feel, closely resembling most mobile RDC applications launched by banks in the United States such as Chase.

Mr. Meara said what is surprising is that Banco Sabadell would beat so many U.S. banks to the mobile RDC punch – particularly considering the state of check payments in Spain.

Checks represent a small minority of payments in Spain—less than 2 percent of payment volume in the National Electronic Clearing System, SNCE, and about 4 percent of value in 2009—yet remain a part of everyday life, per Celent.

Personal checks are rarely used in Spain and are not accepted as a form of payment by most establishments.

However, Mr. Meara said that banks are compelled to honor checks and process them expeditiously.

As check volumes dwindle, the cost to process each item grows substantially.

Checks have been truncated in Spain since 1990 through the Spanish retail payment system, per Celent.

Mr. Meara said that initially checks over a certain value threshold still needed to be delivered to the drawee financial institution, but in 2003 the transmission of images began to replace the delivery of the physical checks exceeding the threshold.

By 2006, virtually all checks cleared electronically, Mr. Meara said.

Remote deposit capture therefore presents a viable value proposition to both banks and their customers in Spain, per Celent.

“We learned from Britain that pushing customers out of the branch onto self-service mechanisms does not endear customers to their banks,” Mr. Meara said. “Now, [with mobile remote deposit capture] there is a way to achieve that objective without the risks of disenfranchisement.”

Final Take
Dan Butcher, associate editor, Mobile Commerce Daily