San Antonio-based bank USAA, whose customers are mainly military personnel, has released an iPhone application that allows its 7.2 million customers to deposit a check by merely photographing it, according to a story in Sunday’s New York Times. “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,” USAA’s Wayne Peacock told the New York Times. Customers photograph both sides of the check and then send the image to the bank via iPhone. They do not need to send in the deposited checks after they are processed, simply void or save them.

There’s been no public description of the security features involved in this, and one suspects there could be quite some room for fraud, but the bank is taking protective measures by only making the service available to the roughly 60 percent of bank customers who qualify for credit or have bank insurance.

As USAA is set up for military personnel, most of its banking has historically been remote (in fact, it has only one brick-and-mortar branch, located in San Antonio). In 2007, the bank introduced a method to deposit checks by scanner.

Hopefully the major banks will start implementing photo check-depositing technology, which is a convenient middle ground for those of who don’t have direct deposit.

Here's a demo of the service that USAA posted on YouTube:

By Mark Alvarez