PayPal: mobile check deposit technology stemmed from 9/11 attacks
I don't know that I've ever heard of anyone reference the events of 9/11 as a good thing, let alone something that advanced technology. But this week at the TechCrunch Disrupt conference in San Francisco, PayPal executive Laura Chambers made a passing comment about 9/11 as she talked about a feature in its new iPhone app, expected to land in the coming days.
The app will allow PayPal customers to deposit checks directly into their PayPal accounts by simply snapping a picture of it and uploading it to the bank. It's not a unique thing - you've likely seen the ads from Chase Bank touting this feature. And digital images are becoming more common as ATM machines now take the checks themselves into the machine and scan an image of them, which can even appear on your receipt.
It seems that the talks about advancing this imagery technology originated after the attacks on 9/11. It was during those few days immediately 9/11 that the government grounded all flights over the United States. That included the daily flights that transported paper checks between banks and processing centers and the federal reserve.
Passed in 2004, legislation known as Check Clearing for the 21st Century, or Check 21, required all banks to clear checks using Check 21 by 2010 - which brings us to tap a picoday. A whitepaper explaining the benefits of Check 21, offered some history:
Historically, once a check is written and used as payment for a transaction that physical check would take an odyssey that might have that check being transported by an armored car service to a bank, run through the banks processing system, picked up by a courier and delivered to an airport for transportation to a Federal Reserve Bank or clearing bank for further processing, and returned by air courier back to the originating bank for further processing and probably returned to you with your monthly bank statement.
I don't really write so many checks these days. Between a swipe of the debit card or an e-bill payment through my bank's bill pay service, who needs to? But with benefits such as shorter processing time (which means my money becomes mine faster) and faster identification of fraudulent activity, I can finally say that I know of one good thing that stemmed from the events on 9/11.