Philadelphia-area bank to accept check deposits from mobile phones

June 7, 2010

Customers of Conestoga Bank in suburban Philadelphia soon will be able to deposit checks from their mobile phones as part of an agreement the bank signed Monday with J&B Software Inc.

J&B Software, a payment processing, imaging and electronic content-management company, will provide a hosted mobile-deposit solution for Conestoga customers, enabling them to deposit checks into their accounts from their iPhone, Blackberry, Android and other cellular phones, says a J&B Software spokesperson.

Conestoga Bank decided to offer customers check deposits from their mobile phones because J&B Software's hosted service reduced many of the upfront costs of installing a mobile-deposit system, Richard Elko, president and CEO of Conestoga Bank, tells ATMMarketplace.

Conestoga Bank, which is based in Chester Springs, Pa., will launch the mobile-phone deposit service later this year. "It will be available in September after summer ends," Elko says.

J&B Software, which is based in Blue Bell, Pa., partnered with Mitek Systems, a San Diego-based company that developed an application for mobile phones. Cellular telephone owners download the application onto their phones.

The application photographs the front and back of the check before transmitting the check's image to the individual's bank's account, says a Mitek spokesperson.

Conestoga's decision to offer deposits from mobile phones breaks a pattern with banks that publicly so far have offered the service.

USAA Bank, which is based in San Antonio, Texas, and Bancorp Bank in Wilmington, Del., which either offer mobile deposits or plan to offer the service later this year, are Internet banks that do not have ATMs or branches. Prior to accepting deposits made from mobile phones, USAA bank customers, primarily active and retired military personnel and their families, mailed check deposits to the bank. Bancorp also accepts deposits by mail or UPS delivery.

Conestoga Bank, however, owns 14 branches throughout Philadelphia County and each office has an ATM, says Elko, who believes mobile deposits will attract new and younger customers. Mobile deposits reflect a changing bank market, he says.

"At one time when a customer switched banks, the new bank just had to open a new checking account. Now, when a customer changes banks, the bank has to switch bill pay, ACH and other services so it is important to get customers when they are young," Elko says.

Conestoga also wants to attract small business owners who move around a lot attending to business matters and don't have time to drive to a bank ATM to deposit customers' checks.

"They won't deposit hundreds of checks, but they will deposit two or three from their mobile phones," Elko says. A recent study by Boston-based Aite Group LLC found that small business owners are willing to pay a monthly fee to make bank deposits by mobile phone. Nick Holland, Yankee Group senior analyst says small business owners are like nomads who need to quickly deposit checks to keep their companies' cash flow liquid.

Conestoga Bank plans to expand beyond mobile deposits, Elko says.

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