Finally, Mobile RDC for Underbanked Is on Its Way

With industry players pining for underbanked mobile remote deposit capture (RDC) services for months, one vendor is poised to delivering the goods. Bank Innovation has learned that FactorCheck LLC is getting ready to launch such a service.

FactorCheck would allow the underbanked to use mobile RDC technology to convert funds on checks virtually through their smartphones to immediate availability on a prepaid card, saving these underbanked consumers from having to make pit stops at check cashing storefronts. FactorCheck says it can decide whether to accept the user’s check in real-time, and the transaction should take about five to seven minutes in total.

“We can make funds available right away,” Eddie Dayan, chief operating officer, tells Bank Innovation.

Because underbanked customers aren’t connected to banks, whoever offers the feature, like FactorCheck, also has to take on the risk.

“There’s a lot of risk out there,” Dayan says.

FactorCheck’s vision of the budding service would work with transactions getting transmitted to its risk management center, and if they’re approved, the funds will be loaded onto pre-assigned debit cards. Currently however, FactorCheck is on a quest to find the right partner that can deliver the prepaid customers before the vendor launches the service.

“We are looking for a strategic partner that we can [operate] a revenue-share model with,” says Dayan, adding there are a lot of avenues it can take to accomplish this task, such as turning to the issuing banks, or going to the processors, or visiting the credit card companies.

“We are talking to everybody. If we find the right partner, we can offer mobile RDC to prepaid card users,” Dayan says. “We are making progress. We are trying to get the word out there and we are close.”

Already, he says his company has the funds to get the technology running, but FactorCheck wants a partner that can feed it customers who will use prepaid mobile RDC. Taking a “conservative” estimate, Dayan expects the technology could be up and running within 60 days.

Though offering mobile RDC is “nothing new,” the novelty is bringing all of the pieces together into a full product for prepaid card customers. “My value-add is risk management, and we have capital,” he says. “We have an appetite for risk.”

FIS is another vendor coming out with a similar product, but for now, “no one has the answers, yet,” Dayan says. “The underbanked technology moves a little slower in the marketplace.”

In early stages of launching the service, he expects FactorCheck and its partner to put value limits on the checks that can be deposited, as well as offer the service only to “better clients.” Additionally, Dayan expects it will limit the types of checks it will accept, such as initially only accepting government checks.

Longer term, Dayan says FactorCheck would like to team up with a Square-type company to empower consumers to not only pay with their cards, but also pay with checks.

In the financial industry, Dayan says “a lot is going mobile.”