USAA allowing iPhone users to send in their checks with an iPhone; American banking stuck in stone age

Checks are a pain in the ass. They’re paper, they need to be deposited in person usually, there can be typos, signature verification issues, the list goes on and on. American banks still use checks, which is simply jaw dropping since checks were invented during the toga wearing times by the ancient romans. How are things on this side of the pond? It isn’t unusual for my friends and I to preorder tickets to a movie we all really want to see. One person buys the tickets, gives us his bank account number, and then via online banking we pay him back. To quote Wikipedia: “In Germany, Austria, the Netherlands, Belgium and Scandinavia, cheques have almost completely vanished in favour of direct bank transfer and electronic payment.” Cashless society rocks! Rant aside, one bank in America, USAA (United Services Automobile Association), is letting customers with an iPhone deposit checks by using the built in camera to take a photo of the front and back of the check using the bank’s iPhone application, and then hitting send. Genius? Yes, but it doesn’t solve the problem that American banks are stuck in the stone age.

[Via: New York Times]

Update: Video demo below:

  • Mike

    Apparently you don’t have identity theft on that side of the pond either. Generally if you give out your bank account number all sorts of bad things start to happen, like your bank account suddenly has no money left in it.

    • Stefan Constantinescu

      There is always risk in the system. Doesn’t mean I want to be inconvenienced with checks.

  • Nigratruo

    I lived 30 years in Europe and wow, US banking is pathetic. It is really is stuck in the stone age. Before coming to the US, I have never handled a check before, never had to. Direct bank transfers work really great in Europe, your salary gets payed there, you pay your rent there, there is no cost involved to do payments. You would never dream about using a credit card to pay something if you can do a direct bank account transfer. Security is also taken care of, since somebody just having your bank account-nr. cannot do anything with it, well, except pay you money, which you never want to block. In the US, security in Banking is a nightmare, most banks seem to have no clue about security at all, they still one one factor authentication, which is terribly insecure. Some idiot Banks (yes, they are IDIOTS for doing this) force you to restrict your password and don’t allow special characters and no passwords that are longer than 10 digits, which in no case you ever ever ever want to do, it carries only disadvantages and no benefits. 
    If you know about information security, you know that 8 is the absolute minimum of security you need in terms of length of passwords. A 8 digit password that cannot include special characters is bruteforced in no time. 10 digits don’t give you any more security at all.

    In Europe you carry your bank card with a pin and can pay with it pretty much anywhere, you can also get cash on any ATM, although some charge extra fees for it (same as in the US). But if you need to pay a larger sum or transfer funds, the fees between banks are free or very low (cents) and it takes about 1 day for the payment to go through, as it is all digital. In the US, all inter account transfers take ages and some services allow you to use a bank funding to pay and well…. ask you for your username and password to access your bank account. As a security professional, my hairs stand on end. This is horrendously wrong and NOT THE WAY TO DO IT.
    You give an institution authorisation to charge to your bank account and then you have the right to cancel the payment up to like 30 days afterwards and can block any unauthorized or fraudulent  payment like this and store owners know this and pay attention.
    ATM cards are also a joke in the US: they still use magnetic stripes, which you can copy no problem, you just run it through a scanner and got all the info on the card. In Europe, many banks use smartchips, which are much more secure and cannot just be read out. 

    Bank to bank transfers would not be a problem when proper security architecture is in place. 
    So US banks, take a trip to Europe and ask any normal citizen to explain it to you, it works great and costs lots less than sending this obscure old outdated payment form called checks around.

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