Stuck with a check that needs to be loaded into your online account? Well, don’t look to PayPal to bridge the gap.
As of June 15, the San Jose-based eBay subsidiary has removed the ability to deposit checks via its mobile app, Consumerist reported yesterday.
Mobile check deposit has had a long run as the “it” feature of mobile banking. Major banks are still adding the feature — RBS Citizens just launched the feature for U.S. customers this month — and earlier this year, Novarica wrote that mobile check deposit, also known as remote deposit capture or RDC, is increasingly a “must-have.”
Well, PayPal clearly disagrees. The company said in an email to users of the remote deposit capture service:
On June 15, 2014, the PayPal Mobile Check Capture service will no longer be available. But don’t worry, you’ll still have access to your transaction history of the checks you had captured through PayPal and can go back to review them at any time. We’re sorry if this is an inconvenience.
The company later provided Consumerist with some of the thinking behind this shift:
Checks have become a less common way to pay for things and many of our customers have either fully moved away from checks or have other ways to pay. In doing this, it allows us to focus on our primary mission, creating a truly digital economy — whether shopping online, paying a friend, or using a mobile device to pay.
There’s no doubt check use is plummeting, and a number of “checking” accounts today don’t offer checks, or offer them only for a fee. Some of the newer banks are wary of remote deposit capture as well — witness GoBank‘s infamous 10-day hold on personal checks deposited via mobile.
But is removing RDC entirely a bridge too far? Anxiety about fraud losses related to remote deposit capture remains high, as a recent American Banker article shows. (Without mentioning this in the title, the article focuses on check-cashing businesses and payday loans, where fraud is more common than in traditional checking accounts.) Yet, 80% of financial institutions have experienced no fraud related to RDC, according to research from RemoteDepositCapture.com.
Check deposit may be a bridge technology on the way to the mobile-only utopia that lies ahead, but however digital we aspire to be, a paper check or two is going to come our way. PayPal has decided that customers should go to another institution to get those funds online. It seems like an odd choice for the company that built its reputation on accepting risk others wouldn’t.