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Lighthouse Consulting Group Granted Patent for Remote Deposit Capture

CheckFaxRDC
No PC required

Carriers convey
checks and deposit
information

Three Easy Steps:
  1 - Enter deposit
       information
  2 - Adhere checks
  3 - And fax
CheckFaxRDC software at the receiving end automatically:
• Crops & aligns
• Assesses image quality
• Pairs front and back images of checks
• Reads check and deposit data
• Relates and proves checks to the deposit
• Handles exceptions
• And sends the data into the RDC processors workflow


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CheckScanRDC

Allows the use of the automatic document feed scanner, enabling multiple checks to be scanned more easily and quickly

Software can be incorporated into existing applications
Use of a carrier ensures check alignment, eliminating operator intervention and simplifying processing

The CheckScanRDC unique identifier ensures that check fronts and back are correctly paired regardless of the order in which they are scanned


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Wenham, Mass. — November 26, 2013 — Lighthouse Consulting Group, LLC (www.LCGLLC.biz), a management consulting firm and remote deposit capture (RDC) innovator, today announced it has received its second United States patent for carrier based RDC. The U.S. Patent and Trademark Office issued patent No. 8,590,940 on November 26, 2013.

In 2011, LCG received a patent on a method which allows users to deposit checks into their bank accounts from their offices or homes by using imaging devices they already own, such as multifunction devices (MFDs), general purpose scanners and FAX machines. No PC being required. Carriers convey checks and deposit information. This technology has been incorporated into CheckFax and CheckScan, which are designed for small and home businesses that deposit 100 or fewer checks per month.

“We’re pleased to receive the U.S. Patent Office’s formal notice that our RDC system is now also patented,” said LCG President Bob Popadic. “Our system is simple and convenient for the user, and at the same time is designed for easy integration into existing RDC and check processing systems.  It is a unique way to deposit checks for the millions of small and home business people who otherwise would be unable to enjoy the benefits of remote deposit capture.”

The patent covers a system for remote depositing negotiable instruments comprising:

• A carrier in which to place multiple negotiable instruments, the carrier having an identifier on a front and back side of the carrier, the identifier being independent of data on the negotiable instruments and being unique to the carrier; and the carrier being designed to permit imaging of both the fronts and backs of  the negotiable instruments;

• An imaging device for separately generating and transmitting one front and one back electronic image of all the negotiable instruments and the unique identifier, while the negotiable instruments are secured to the carrier;

• A link configured to permit the image device to communicate with a network for directing the front and back electronic images of the carrier to a remote location for subsequent pairing of the front and back images; and

• A receiving unit at the remote location for receiving and storing the separately transmitted front and back images of the negotiable instruments and having software designed to break down the individual front and back images of each negotiable instrument and, using the unique identifier, subsequently pair the front and back images of the each negotiable instrument so as to provide a complete image of each such negotiable instrument.

The patent covers a variety of carrier types, carriers that provide a surface area for providing deposit information, and methods for preventing redeposit.

Download Press Release as a PDF



Small and home businesses (SHBs) are willing to pay a per check premium in order to make deposits from their office using special carriers and fax (see sidebar – 2010-11 Survey of Small and Home Business Check Deposit Practices). While the survey question was specific to our CheckFaxRDC solution, we believe the results have general applicability to SHB RDC.  The average premium willing to be paid was $0.37 per check, but there were significant relatively equal peaks at $0.10, $0.25, $0.50 and $1.00 suggesting a segmented market. Further investigation showed this was related to the number of checks deposited per month and the value of the person making the deposit.

The premium derives from the perceived cost of depositing a check, and how much one is willing to pay to avoid that cost (the $0.37 above).  The perceived cost, which in the survey averaged $17, and had a range up to $150 per check, is driven by:
• Number of checks per deposit,
• Number of trips to the bank,
• Time it takes to go to the bank, and
• Value of the person going to the bank.

The first three drivers had values that one might expect. The average number of checks deposited per month was 37.  For those depositing 100 or fewer checks per month the average dropped to 15.  Trips to the bank average 4 per month, with a range of from 1 to 22.  Time to go to the bank averaged 21 minutes.

What is surprising was the range of values for the person making the trip to the bank, which ran from $0 to $500 per hour. While 55% of respondents valued the person going to the bank at $50 or less per hour, the other 45% placed much higher values, clearly indicating non-clerical personnel making deposits. 

Supporting this observation is an average business size of 6 employees and inclusion of business types that typically deposit a few large checks per month. A recent article on our website identifies those industries. To get to 100 checks per month these businesses needed to have 10 to 25 employees, which is fairly good size by SHBs standards.

The SHB market is huge, including 20.1 million non-cash businesses depositing 100 or fewer checks per month. In aggregate they deposit 4.5 billion checks per year.  Businesses without employees account for 16.8 million of the 20.1 million and deposit 3.0 billion checks.  The 3.3 million businesses with employees deposit another 1.5 billion checks.

The portion of the SHB market willing to pay a per check premium is large. Many of these businesses are highly attractive customers to banks. Because of their low deposit volume a variable cost solution is needed.  Because the person preparing and making the deposit does it as an adjunct to other responsibilities, the RDC solution has to be simple and easy to use.

Because small and home businesses (SHBs) are a category we are often tempted to think of them as homogeneous, or even worse as being like consumers. Small and home businesses are not consumers and generally consumer oriented RDC solutions do not meet their needs.

Some SHBs Do and Some Don’t Accept Cash
Like large businesses they identify with their industry first and just happen to be small.  They share industry characteristics, such as: whether they accept cash, credit/debit cards, and checks; and the average check size.  Like larger businesses, if they receive cash they need to get to a bank or ATM.  This makes them less attractive RDC candidates than those in non-cash businesses.

Some Non-Cash SHBs Deposit Many Small Checks and Others Only a Few Large Ones
There are 20.1 million non-cash small and home businesses depositing 100 or fewer checks per month.  In aggregate they deposit 4.5 billion checks per year.  As the top entries in the table below show, many desirable customers don’t deposit a large number of checks.  In certain industries, checks per employee are low and the amount of the check is relatively large.  To get to 100 checks per month these SHBs require a fair number of employees and a fair amount of check revenue. 

Size to Have 100 Checks Per Month
Industry                                                      

Real Estate                                                  
Engineering, Legal & Management Service
Health Services                      
Manufacturing                          
Agriculture, Mining & Construction  
Transportation                         
Wholesale Trade                     
Business Services                                          
Insurance                                        
Printing and Publishing                 
Other Services                             
Communications     
Employees

25        
18       
19                  
16        
10     
5
4          
3                         
2         
2        
1      
1     
Revenue in Millions
$4.0
$1.6
$1.5
$4.5
$1.9
$0.4
$3.2
$0.1
$1.3
$0.4
$0.1
$0.2




CheckFax Remote Deposit Capture Technology Enables Deposits from Fax Machines and Multi Function Devices

Wenham, Mass. June 3, 2011 — Lighthouse Consulting Group, LLC, a management consulting firm and remote deposit capture (RDC) innovator, today announced it has received a United States patent for its CheckFaxRDC application.


In a process similar to banks accepting check deposits through dedicated check scanners attached to PCs, the LCG technology allows users to deposit personal or business checks into their bank accounts from their offices by using imaging devices they already own, such as fax machines and multifunction devices (MFDs). No PC is required. Carriers convey checks and deposit information. Three Easy Steps: 1) Enter deposit information; 2) Adhere checks to carriers; and 3) Fax. The now-patented application relies on LCG’s expertise in RDC technology and understanding the needs of small and home business that deposit 100 or fewer checks per month.

The U.S. Patent and Trademark Office granted LCG patent No. 7,950,698 B2 on May 31, 2011.

“We’re pleased to receive the U.S. Patent Office’s formal notice that our CheckFaxRDC application is now a patented capability,” said LCG President Bob Popadic. “We made it simple and convenient for the user, and at the same time designed it for easy integration into existing RDC and check processes.  We invested a lot of thought leadership, time and money into making CheckFaxRDC a unique way to deposit checks for the millions of small and home business people who otherwise would be unable to enjoy the benefits of remote deposit capture.”

CheckFaxRDC allows the use of single sided imaging devices for RDC, while assuring the integrity of the deposit and individual checks. A unique identifier enables pairing of front and back images of checks regardless of the order in which the checks are imaged or transmitted. The LCG software receives the transmitted carrier images, including checks and deposit information; extracts, crops and aligns the checks; assesses image quality; pairs the front and back images of checks; reads check and deposit data; relates and proves checks to the deposit; handles exceptions; and sends the data into the RDC workflow.

The patent covers a method for remote depositing negotiable instruments: using a carrier that permits imaging of the front and back of the negotiable instrument; securing the negotiable instrument to the carrier; creating a unique identifier on the front and back sides of the carrier; generating an electronic image of the negotiable instrument and unique identifier; transmitting that image; and pairing at a remote location the front and back images using the unique identifier.

The patent also covers providing an area on the surface of the carrier to provide deposit information, and securing a deposit ticket to the carrier. Also covered are a variety of carrier types and methods for preventing redeposit.


Download Press Release as a PDF
RESEARCH

March 2011
Small and Home Busines Check Deposit Practices 2010-11 Survey Results


October 2007
Small Business RDC Survey Results


ARTICLES


2012
Some Small and Home Businesses Willing to Pay Large Premium for RDC

Small and Home Businesses Are Not All the Same – An RDC View


2011
Lighthouse Consulting Group, LLC Granted Patent for CheckFaxRDC Application

2010 Survey of Small and Home Business Check Deposit Practices Now Closed

2010
LCG Sets Up LinkedIn Small and Home Business Depositor Group

CheckFaxRDC Compared to Other Remote Deposit Capture Solutions

2009
Looking Beyond the Averages When Offering RDC to Small and Home Businesses


2008
Oil Prices, Credit Crises - Alternate Routes to Remote Deposit Capture Growth


What will the role of branches be in 2015?

Remote Deposit Capture Creates Market Segmentation Opportunities


2006
Fax Machines - Check Scanners
Small Business Already Have


2005
Small Business - A Remote Capture Opportunity

Remote Check Image Capture -  Business Case Behind the Marketing Opportunity

2004
Check 21 a Marketing Opportunity!


2003
Check 21 Act Passes Congress - Opportunities and Concerns


When Will Banks Get On

Board for Check Imaging?


Customer Relationship Management - Why Expectations Go Unmet


Recover from a Disaster or Risk Customer Attrition


Internet Attacks May Be the Least of Your Worries!

Losing the Paper Chase


2002
Fewer Checks to Be Written and Even Fewer to Be Posted

Depositing Checks from Your Office
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