Fiserv Inc. is evaluating a check imaging system that enables consumers to deposit checks using their mobile phones.
The banking technology provider is testing software from Mitek Systems Inc. with some of Fiserv's clients and hopes to expand the program, said Rod Springhetti, Fiserv's vice president of business planning for global payment solutions.
He said that Fiserv is still trying to determine whether it should position Mitek's Mobile Deposit software as a remote deposit product or a mobile banking product but that he is confident it will find an audience.
Springhetti said he focused "more on what I think the opportunity is than whether the technology works. I was convinced very early that the technology is very plausible … it's very exciting, it's very innovative."
Not all consumers write checks, but "every socioeconomic group receives checks," he said. "There is definitely, we believe, a consumer segment that is interested. What you've got to do is intersect that with: how many checks do they really deposit? It's not a volume play with them. It's much more a convenience play."
There are business opportunities as well, he said, particularly among vendors such as florists, who specialize in perishable goods and want to validate the payments they receive upon delivery.
"There's so much excitement in that market niche because they can start that check in the check processing cycle as quickly as possible and get notification of any problem as early as possible," Springhetti said. "I think it's a group that the banks will not be able to ignore."
Louise Steller, Mitek's director of sales, said the San Diego company has similar deals with about 10 vendors, though "Fiserv is definitely one of the larger vendors that we're working with."
As more phones are built with hardware capable of taking clean enough photos to use for image deposit, more vendors and banks are expressing interest in the technology, Steller said. "Six years ago this wouldn't have been possible at all."
Fiserv, of Brookfield, Wis., is in a good position to find the technology's sweet spot, Springhetti said.
"Banks were looking for a vendor who understood the remote deposit capture world and understood the mobile banking world, because it really is an intersection of those two things," he said.
Fiserv is working with some banks to gauge the system's appeal to those audiences, and "as we complete these customer validations, we have both of those groups participating and it will help guide when we will make it available in various aspects," Springhetti said.
Mitek's technology eventually could be offered as more than one type of product, customized by each Fiserv team to best suit its own audience, though it is too early to make that decision, Springhetti said.
Aaron McPherson, a research manager for payments at the Framingham, Mass., research firm IDC Financial Insights, said that for Mitek, "the announcement from Fiserv is a big step forward."
Though Mitek has been promoting its technology, it has not caught on as quickly as McPherson expected.
This actually works to Fiserv's advantage as it conducts its tests, McPherson said. There is no rush because "there's really no one else doing it," he said.
Fiserv is on the right track in pitching the technology to consumers and small businesses instead of larger merchants, McPherson said.
To those smaller clients, "depositing checks is a big pain," he said. "It's like the last remaining reason to go to a branch."
