A new service makes it possible for bank customers to deposit checks immediately through their mobile phones. How it works? Simple. Using a special application they can take a picture of both sides of the check with the phone’s camera and electronically deposit it to their account.

USSA – an American privately held bank and insurance company – presents this new service called USAA Deposit@Mobile which is available for the iPhone only.

“We’re essentially taking an image of the check, and once you hit the send button, that image is going into our deposit-taking system as any other check would”, said Wayne Peacock, the USAA executive vice president in an article in The New York Times.

In other words: customers will not have to mail the check to the bank later; the deposit will be handled entirely electronically. When the check is deposited, the bank suggests voiding it and subsequently filing or discarding it.

Reduce fraud
To reduce the potential for fraud, only customers who are eligible for credit and have some type of insurance through USAA will be permitted to use the electronic deposit service. According to Mr. Peacock, about 60 percent of the bank’s customers qualify.

With only one branch and customers all over the world, USAA is developing an anytime, anywhere banking strategy. The Deposit@Mobile service comes after an earlier variant that allowed customers to deposit a check from home using a computer with a scanner.

Time savings
“Mobile is going to be a bigger part of how people do commerce and how they interact with their financial institutions,” Mr. Peacock said. “The great value that we see is the time savings.”

The use of mobile banking innovation seems justified. A study released recently by comScore, a digital audience measurement company, found that more than 15 million people in the United States use mobile banking each month, a number that is expected to grow as networks become faster and more people migrate to smartphones.

The new service is available for the iPhone only. USAA has updated its iPhone application this week to introduce the check deposit feature. “Later this year, we anticipate releasing the mobile applications and USAA Deposit@Mobile service for the BlackBerry. In early 2010, we expect to release the technology for other devices.”

Click here for the demonstration video.

The first picture above: J. Michael Short for USAA