ATM check imaging: A win-win

Utah-based America First Credit Union surveyed members at its branches to find out which transactions were most in demand. An enormous percentage of them visited branches to cash checks.

In response, the credit union rolled out check cashing at a handful of ATMs. Based on the popularity of those machines — and with Check 21 as an added incentive — America First plans to introduce the functionality on more of its ATMs.

How it works

At America First ATMs, members feed checks into the depositor. Images of the check are displayed on the screen for members' validation. At the transaction’s conclusion, an image of the check is printed on the receipt. No fees are charged for the service, which is offered only to America First customers.

In addition to check cashing, advanced transactions include check cashing with deposit and check cashing with bill payment. Customers can get cash back with any transaction; change is deposited in the cardholder’s account.

All checks are cashed, unless written from a questionable account. "We compare the MICR line data to a list we maintain," said Chad Lynch, the credit union’s ATM services manager.

Increased interest

Interest in check imaging at the ATM has been rising in the past couple of years, and especially since the passage of Check 21, said Laura Drozda, a senior product manager for Diebold.

"The ATM is a great place to start check imaging because you can save money and increase customer satisfaction at the same time," she said.

Consumers have consistently expressed interest in cashing checks at ATMs. Seventy percent would do so if the service was available, according to Diebold market research. Yet financial institutions hesitate to offer check deposits or even check cashing because of increased service/maintenance costs, especially at off-site machines.

Traditionally, checks must be collected from ATMs every day for processing. With image capabilities and envelope-free deposits, however, FIs can transmit images to their back offices and postpone check pick-ups, timing them to coincide with cash runs.

While America First does not yet transmit images to its back office, Lynch said it plans to do so as it revises its check handling policies with Check 21 in mind. "We're going to save a ton of money by not making vendors go out to the machines every day," he said.

Increased replenishment frequency may be necessary for ATMs offering check cashing, but Lynch feels these balance out. "I may have to bump the cash levels at the ATM at that Wal-Mart. But the cash levels are also probably going to go down at the branch," he said, referring to a Wal-Mart-based America First ATM that boasted 45 check cashing transactions in its first week.

A potential cost savings, while attractive, isn't the primary reason America First is offering the service.

"It's not for us, it's for our members," Lynch said. "Wherever they are, we want to give them full access to their accounts. Providing the best possible service will bring us more members, which will ultimately keep us healthy."