PayPal executive Laura Chambers recently remarked that the company’s iPhone app would be updated to allow users to deposit checks directly to their accounts simply by taking a photo of the front and back of each check. The update is apparently due "in the next day or so."
This kind of deposit-by-photo technology has been used by various banks already, but it’s an interesting use case for PayPal. Up until now, the service has relied on transfers from an outside bank or from other PayPal users to fund accounts. There’s also a funding service called Green Dot that allows people to fund their accounts at various retail stores.
This new deposit method will mark the first time PayPal users will be able to directly deposit checks written by other people into their accounts without getting a bank involved somewhere in the process.
It’ll be interesting to see if PayPal eventually attempts to become like a bank itself. The service is not directly insured by the FDIC, but instead places members’ money in FDIC-insured banks and acts as an intermediary. Perhaps this new ability to remotely deposit checks may eventually lead to PayPal operating more and more like an internet-based bank.
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