In mobile banking technology, remote deposit capture is ancient history. But there's one area that history seems to have forgotten: business payment automation.
The technology, which allows users to deposit a check by snapping an image of it with a mobile phone's camera, has been a staple of consumer mobile banking as far back as 2010, and by 2012 was already considered a gateway to broader mobile financial services such as payments and transfers. KeyCorp plans to introduce mobile remote deposit capture to its business clients later this year.
"In the corporate system, the more you take advantage of consumer technology that people are already using, the better," said Clark Khayat, group head of enterprise commercial payments for KeyCorp.
Like all banks and payment companies, Key, of Cleveland, faces a big challenge in getting businesses to use technology for payments, despite the automation of other parts of businesses processes. About two-thirds of midmarket business payments and more than half of large business payments are still made by check, according to Khayat.
By allowing people to retain their paper check habit through mobile check capture, the bank hopes to get its foot in the door to encourage the automation of payments and other parts of treasury management.
"If people are doing something at home, like taking a picture of a check, it should be easy for you to do it at work," Khayat said. "People are more likely to adapt quickly if they don't have to do anything different than what they're used to."
The impediments to adding payments technology have eroded over time, but upgrades have usually been deterred by inertia and the scale of upgrade projects. It's easier for consumers and small businesses to experiment with an app than it is for a large corporation with more than 10,000 employees.
The prevailing mentality at the corporate level, Khayat said, is to avoid large changes where possible. So a technology upgrade — such as moving to a new version of Office — is often put off as long as possible because of the training and expense involved in migrating an entire company to a new system.
There are still hurdles, Khayat said, since an automated process such as mobile remote deposit capture doesn't work the same way in a company as it does for an individual person.
"In a corporate environment there are more steps," he said. "It's more than taking a picture—there's a person in another department that has to get the check. So there's going to be more process engineering."
There are also lingering cultural hurdles, such as a reluctance to change processes without permission. That feeds another way that Key is approaching business payments — by acting as a consultant. "We tend to do more process education than education about how to use a product, and we have made some inroads that way," Khayat said.
Key and other banks face substantial pressures to persuade clients to use new payments technology, since disruptors abound. App companies like Uber and Arbnb use digital payment models that are designed to avoid bank bureaucracies.
And the business model of many technology vendors also poses a threat. Vendors automate one part of a business payments process and use a sponsor bank to execute the payment, Khayat said, adding the bank can lose the business of that client if it's not the sponsor bank for a popular payments processing vendor.
To help compete, Key teams with technology companies that focus on the bank's client base and solve a specific "pain point," Khayat said. For example, it recently partnered with Aptexx, a real estate mobile payments technology company, and it has made investments in the health care technology company InstaMed and the paper invoice automation company AvidXchange.
The business payments automation market will also draw more attention as the potential efficiencies become more widely known. Writing in PaymentsSource, Bill.com founder Rene Lacerte noted that the average cost to process a business payment is about $65, which costs the entire U.S. economy about $1 trillion per year based on paper-based business payments. "There remains a tremendous opportunity to drive further efficiencies and accelerate business' adoption of electronic payments," Lacerte wrote.
