Competition Update: Banks Deploying Image-Scanning ATMs

CU360
January 28, 2008 | COMMENTS

JPMorgan Chase is deploying 900 image-scanning ATMs in the first half of 2008 that can accept up to 30 checks at a time without using an envelope.

The rollout is part of an effort to upgrade or replace the company's 5,000 deposit-taking ATMs with envelope-free, multi-check machines by the end of the decade.

The new ATMs can scan and print a receipt image of a check for consumers within 60 seconds creating an immediate transaction record. Transaction volume increased 50% at some of the 50 locations where the new machines were tested in Indiana and Kentucky starting in 2002.

"A lot of people don't feel comfortable making ATM deposits today. With these ATMs, they get an actual image of the check, and it counts the money for them, and they have a little piece of paper they can take away from the ATM that shows them exactly what their deposit is," Patrick Wright, the head of retail operations at JPMorgan Chase, told American Banker.

The scanning technology also serves as a cost and time saver because it can scan and process check images electronically instead of using a courier to unload and transport the checks for manual processing.

The company plans eventually to extend its daily check deposit deadline to as late as 10 p.m. or 11 p.m. "As the technology advances, we would like to take it even later," he said. The daily deposit deadline is typically 5 p.m. or 6 p.m. at branches in major metropolitan areas, but much earlier in some rural locations, he said.

Bob Meara, a senior analyst at the Boston market research firm Celent, tells American Banker that the arrival of no-envelope, bulk-load machines reflects an effort by financial institutions to cut branch costs by driving more business to ATMs.

"Image ATMs have boosted per-ATM transaction numbers and changed the transactional mix to more significantly favor deposits instead of withdrawals," he said. Using the machines to accept deposits will be much less costly over the long run than accepting them at traditional, staffed branches.

A study Celent published in August found that fewer than 20% of the largest U.S. banks use image-scanning ATMs, though more than 40% of those surveyed planned to upgrade to the technology.

JPMorgan Chase said it planned to deploy the multi-check ATMs at bank branches and kiosks across its 20-state area. Wells Fargo announced in January that it planned to deploy up to 1,200 multi-check scanning ATMs.