The Mobile Check

Periodically in this space we comment on mobile payments. After all, we report on this technology pretty regularly both in this magazine and in our daily newsletter, Digital Transactions News. We do so because it seems likely that, sooner or later, most if not all digital payments will initiate from a virtual token rather than from a piece of plastic.

But what about checks? How can this stubborn slip of paper, this relic from the distant, cobwebbed past, be mobilized?

I had occasion to think about this recently when I took out a new account with one of the biggest banks in the country. We were wrapping things up when I asked the banker about ordering checks. He looked surprised and said nobody asks about checks any more, and in any case why would I want any?

Yes, there are folks out there who will accept only cash or checks—a dwindling number, no doubt, but they must be paid for services rendered. As it happens, most if not all of these folks have mobile phones these days. So why not a mobile check payment?

Actually, the underlying technology has already been mapped out. Late in 2009, a paper appeared describing something called an electronic payment order, or EPO. This EPO would take advantage of existing image-exchange systems to route transactions, but unlike conventional check images the EPOs would be digital from the start, with no paper original or substitute check. You would literally “write” the check on your phone and message the encrypted check image to your payee’s phone.

“We wanted to get people thinking about this idea and how it would be feasible,” Katy Jacob, one of the paper’s authors, told me at the time. Jacob was one of six authors of the paper, five of whom, including Jacob, were with the Chicago Fed, which published the paper. She has moved on since then.

Well, if getting people to think about it was one of the authors’ aims, that doesn’t seem to have happened. It’s been eight years since that paper, and I’ve seen no evidence of an EPO-like concept. Yet checks aren’t going away all that fast. The latest triennial payments study from the Fed indicates there were 17.3 billion check payments in 2015. Yes, that’s down 12% from 2012, but many observers expected a much steeper decline.

So what about it? Why not an EPO? Think of the use cases in paying vendors, handymen, friends and relatives. You know that paper check you do write is going to be imaged, any way. If you know of any news in this area, I’m all ears at 630-547-2887 or email me.

John Stewart, Editor, john@digitaltransactions.net