Could Free Scanners Unlock Small Businesses for Remote Capture?

With free card-swipe terminals having already captured the imagination of acquirers and merchants, the notion of free check scanners might not be far behind. Indeed, free equipment that reads magnetic-ink-character-recognition lines while capturing check images could be the key for banks to drive remote deposit capture adoption among small businesses, a new research report released on Monday suggests. Fifty-eight percent of small businesses that are not using remote capture say free scanners from their banks would make their adoption of the technology more likely. A leased scanner from the bank, or a list of approved scanner vendors from the same source, has much less appeal, garnering scores of 22% and 14%, respectively. That's according to a survey of 303 small businesses conducted in November by Aite Group LLC. According to the survey, 16% of the businesses are using remote capture, a proportion Aite projects will grow to fully one quarter by the end of next year. Encouraged by the Check Clearing Act for the 21st Century (Check 21), remote deposit capture allows merchants and other check-accepting businesses to scan checks and send the images to their banks for deposit. While the product has proven extremely popular?some observers argue it is the fastest-growing form of electronic payment ever introduced?banks have until recently focused on selling it to their largest clients. Now, they're starting to find takers among smaller businesses. A survey of large banks by Aite Group last summer found that 69% were offering remote capture to small businesses, with the remainder planning to do so by the summer of 2009. Small businesses are starting to respond. “While their adoption of remote deposit is still somewhat low to date, small businesses are showing a keen interest in it despite its only recent availability to them,” notes Aite analyst Christine Barry in the latest report. A major reason is the product's ability to cut float times, with half of responding businesses not using remote capture citing “quicker availability of funds” as a reason for their interest in the technology, according the report. But the biggest motivator of all is free scanners, the report says, a factor that beats not only faster funds availability but also the benefits of eliminating the need to physically cart checks to the bank and lower transaction costs. This result follows from the fact that small-business owners “often have limited budgets, and as a result are often very cost-conscious,” says Barry in the report. But banks may be proving slow to pick up on the primacy of free devices in motivating small businesses. The survey reveals that, among current users of remote-capture services, 27% have had their scanners supplied free by their banks. Some 52% report they are getting faster funds availability. If more banks begin offering free scanners, the move would follow the rapidly growing trend among independent sales organizations to offer merchants free point-of-sale terminals for card processing as a way of winning the more lucrative fee-based business of handling transactions.