What Is a Remote Deposit Capture (RDC) and How It Works?

Owing to the convenience of a remote deposit capture, the whole world is trying to digitise everything and shift to this technology. RDC was a boon during the lockdown, which helped corporations to run its business.

In this article, we will learn about the various aspects related to remote deposit capture, which help us to understand this in a better way.

Remote Deposit Capture is a specialised service whose unique system allows a customer remote access to scan cheques easily and transmit the check images to a bank for deposit. It is usually accomplished with the help of an encrypted Internet connection.

You need to have a few basic things to use a Remote Deposit Capture (RDC) service. These are:

• RDC Software: The RDC services require software to work. 
• RDC Hardware or Cheque Scanners: The sent images require a cheque scanner to scan and process further. 
• Updated Agreements: Every agreement should be kept updated for the bank to continue using the RDC service.
• Depository Bank: A depository bank is the first and foremost thing required to use a remote deposit capture.

The process for a remote deposit capture is quite simple, and the steps are mentioned below: 

• Step 1: Receive the cheques, either by mail or in person.
• Step 2: Normal processing is started with account updates and deposit preparation.
• Step 3: A digital deposit is created by capturing the front and back parts of the cheque.
• Step 4: A secure internet connection is used to transfer the prepared digital deposit to the concerned financial institution.
• Step 5: Lastly, the financial institution gets hold of all the deposit images and the concerned data and provides ACH or Automated Clearing House decisions.

Now that you are acquainted with the working of a remote deposit capture, let us focus on the advantages:

• Allows the customer to use a laptop, smartphone, and tablet.  
• Saves time by reducing bank trips.
• You can deposit a cheque at any time of the day.
• It can also be used for a pay cheque, gift cheque, or any kind of cheque received.

With the increasing use of Remote Deposit Captures, the risks associated with RDC are also increasing gradually. Learn about them below:

• Frauds: The most significant risk of using RDC is the very high chance of fraud. The various frauds associated are: 
  • Identity Fraudulence 
  • Changed Data 
  • Counterfeit Cheques
  • Redeposit Frauds
• Rejection of Cheques: Image clarity is a very important requirement when it comes to RDC. So, if the images are not captured properly, the bank might reject the cheques.
• Coverage by Insurance: One of the biggest drawbacks of remote deposit capture is that this process is very much prone to fraud. Hence, it greatly affects the financial institution's insurance needs.

Thus, RDC is a popular financial tool that comes with its set of benefits and some challenges as well. However, financial institutions have been able to get rid of the challenges and limitations that come with RDC, and this technology is regarded as generally safe.