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December 2006
Fax Machines - Check Scanners Small Business Already Have
Lighthouse Consulting Group, LLC filed a
patent application in 2006 for using fax machines and other
general-purpose scanners for remote check image capture. This approach
will make the benefits of remote check deposit available to many more
businesses and individuals than current solutions that depend on
dedicated scanners attached to PCs. It will also provide offering banks
a way to competitively differentiate themselves in the marketplace.
Over the last few years the number of banks offering remote deposit
capture has increased significantly; and there is a growing base of
business customers using the service. But for many businesses there are
serious disadvantages to current offerings.
• They require a PC and the purchase of a dedicated
scanner. This can be a significant investment for a small business; or
for a bank that wishes
to provide scanners free to a large number of customers.
• They do not take advantage of imaging devices
customers already have on their desktops, such as fax machines and
general-purpose scanners.
• They are not cost effective for customers with a small volume of checks.
• They require customers to purchase equipment in order to try out a remote deposit capture service.
A fax based solution addresses the needs of small businesses and high
net worth individuals, who deposit up to 100 checks per month. In 12
select industries, there are over 3.3 million predominately non-cash
businesses that meet these criteria. They deposit over 1.5 billion
checks per year. In addition, twelve percent of all households have fax
machines, with penetration greater in high net worth households. In our
view:
1. There is demand for the benefits of a remote deposit
solution by businesses and individuals depositing only a few checks per
month.
2. The economics are different than at higher volume
levels - the benefit per check of avoiding a trip to the bank are much
greater.
3. This market can afford to pay banks for the somewhat higher per check costs that might be incurred.
4. Current solutions do not address this market because of the high fixed cost of the dedicated scanner.
5. For this segment the alternative is trips to the bank and using high cost tellers.
LCG's fax solution employs a patent pending system, process, and check
carriers. It replaces a fixed cost dedicated device with variable cost
check carriers that facilitate scanning, security, and keeping front
and back images together. It is compatible with existing image capture
software, providing images and data comparable to those transmitted to
the bank by a PC with scanner attached. It is economical for customers
with low check volume and enables banks to cost effectively offer
remote capture to them.
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