Being that none of the banks I currently use support remote deposit (taking photos of checks and uploading them instead of bringing the physical checks in), I was very interested to hear that PayPal finally added check deposit ability to their Android app. This post covers my experiences with that service.
First of all, the actual check deposit feature is hard to find, it is not under “Add Money”, rather it is under tools. Second, the Paypal Android app itself seems to be someone unstable since it keeps on occasionally crashes or failing to login. Regardless, once you locate the feature, the actual process seems to be straight forward – sign the check, take a picture of the front and back, and send it in. PayPal recommends that you hold on to the check for 15 days. I do like the fact that no fees are being assessed by PayPal for the service, but time will tell if it will stay that way. Once the check is processed, you receive it as a payment to your PayPal account, and you can then either use it or withdraw it into your bank account. Combined with the PayPal credit card that feeds from your balance, it can actually allow someone to bank completely without having a bank – something that many companies like WalMart, GreenDot and of course your neighborhood check cashing places do. I can easily see blue collar workers that are young and mobile savvy use this feature to deposit checks and then transfer money to relatives overseas instead of the regular check cashing/Western Union route.
I had two problems with the process:
1. There is no indication on the regular Desktop site what is going on with the checks. When the checks are actually processed, they appear in your account as a payment from a merchant called “PayPal Check Capture”, and the only way to figure out what check goes with which payment, or to check on the status of the process is to go into the mobile app on your phone.
2. My biggest problem is time – it took almost 10 days to process a single small amount check while for example, Bank of America deposits checks same day via their ATM if they are put in before 8 PM. That is an absurd amount of time for a check, but perhaps the anti-fraud mechanism is what slows it down.
Overall I am satisfied with the service but everyone should be well aware that this deposit method takes time. It would be interesting to see if combining PayPal Check Deposit and Square for credit processing with a small business would actually eliminate the need for a gateway and a bank account.