Remote Deposit Capture (RDC) and mobile RDC streamline the process of depositing paper checks for businesses and consumers. RDC is a method of processing payments without sending checks to the bank. A check is scanned or a photo is taken for faster and more accurate results over paper documents. Most RDC customers are businesses that use scanners to avoid the time and cost of transporting paper checks to the bank, though consumers enjoy the convenience of depositing checks using their computers, tablets, and smartphones.

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What is RDC?

Passed in October 2003 and implemented in October 2004, the Check Clearing for the 21st Century Act (also called Check 21), allowed substitute checks to be considered legally equivalent to the original checks and that was the beginning of RDC. Known by many different names: “Image Cash Letter”, “Corporate Capture”, “Merchant Capture” and “Image Deposits”, RDC is the name that encompasses the process of curtailing a physical check and clearing it electronically. This legislation allowed banks to use images of checks instead of having to ship the physical check back to the paying bank for processing. RDC delivers substantial value for both banks and their customers including convenience, reduced transportation costs, and higher efficiencies. 

How Does RDC Work?

RDC empowers consumers and businesses to scan checks and transmit the images to a bank for digital deposits. The digital deposit is sent over an encrypted internet connection to the bank that accepts the deposit and posts it to your account. Banks convert the images of checks into substitute checks to replace the original. Once the image of the check is captured and the substitute check is generated, the bank begins the process of collecting the money from the writer of the check. The image is important to the bank. Images cannot exceed a certain file size or be blurry, they must have a minimum of dots per inch (DPI) and be in a certain file format. Banks have also reserved the right not to accept all checks via RDC including new checking account checks, traveler's checks, and checks made out to someone other than the account holder.

The Value of RDC

RDC is a technology that delivers value to both banks and their customers. There are significant cost savings for the bank because they don’t have to transport checks to the paying bank. In addition to cost savings, banks attract new customers from further distances because they don’t need to visit a branch to deposit a check, and banks attract customers with RDC who want the convenience of remote deposit. For customers, RDC eliminates trips to the bank and it makes it possible to deposit checks into your account at any time of day 24/7. RDC is also efficient because nearly any type of check can be deposited in their account, from payroll checks, to gift checks to refund checks. Businesses have the same conveniences and efficiencies just at a larger scale. Businesses often use electronic scanners to capture images of their checks, which are rented or given to them by their bank.

Streamlining RDC for Fintech Companies

Similar to the way RDC streamlined the process of depositing checks for consumers and businesses, Synapse has streamlined the way RDC is done for fintech companies. Traditionally the platform would have to find a vendor to give them a Software Development Kit (SDK) for RDC, then find a bank that will accept and process the file from the SDK. Next, the platform would have to write a Check21 file parser and then write logic for returns and risk management. 

With Synapse, there are no SDKs required, the platform simply has to deposit a check electronically by submitting an image of the front and the back of the check.