“Mitek Systems is the leading innovator of advanced Image Analytics and Optical Character Recognition ("OCR") software that captures and reads data from any scanned document. A pioneer in intelligent recognition technology since 1985, Mitek Systems' software is used by the top 5 financial institutions in the United States and is used to process over 10 billion checks per year, monitor elections in the U.K. and mange container shipments in Singapore.“
- Mobile Deposit – Enables users to deposit their check by taking a picture of check using their smart phone. Available for iPhone, Android, Blackberry and Windows Phones
- Mobile Photo Bill Pay – Enables users with smart phone to snap a picture of their bill and pay them. Available for iPhone currently, soon for other platforms.
A side effect of the law is that it is legal for anyone to use a computer scanner to capture images of checks and deposit them electronically, a process known as remote deposit.
Paper checks continue to transition to electronic images at an extraordinary rate with almost 70% of all institutions now receiving images.
The process of removing the paper check from its processing flow is called truncation. In truncation, both sides of the paper check are scanned to produce digital images.
Once a check is truncated, businesses and banks can work with either the digital image or a print reproduction of it. Images can be exchanged between member banks, savings and loans, credit unions, servicers, clearinghouses, and the Federal Reserve Bank.
Check 21 has also spawned a new bank treasury management product known as remote deposit. This process allows depositing customers the ability to capture front and rear images of checks along with their respective MICR data for those being deposited. This data is then uploaded to their depositing institution, and the customer's account is then credited. Remote deposit therefore precludes the need for merchants and other large depositers to travel to the bank (or branch) to physically make a deposit.
Not all banks have the ability to receive image files, so there are companies who offer the service
- The Check Clearing for the 21st Century Act (or Check 21 Act) is a United States federal law, Pub.L. 108-100, enacted into law October 28, 2003 by the 108th Congress. It took effect one year later, on October 28, 2004. The law allows the recipient of the original paper check to create a digital version of the original check—called a "substitute check," thereby eliminating the need for further handling of the physical document.
- RDM Corporation
- J&B Software
- Secure Payment Systems
- Skyline’s DirectFED Payment Solutions
- Wausau Financial Systems
- Bancorp Bank in April 2010 adopted Mitek’s Mobile Deposit application
- Conestoga Bank signed a deal to use Mobile Deposit in June 2010
- Chase added Mobile Deposit to its iphone app in July 2010, which uses Mitek’s technology
- Paypal introduced check capture app in October 2010
- Mitek was granted a US patent for the Mobile Deposit Application in August 2010. The scope of the patent can be found here.
Mitek is a leader in a niche space (optical recognition) of the exciting Mobile Banking and smart phone applications market. It has run up a lot recently, but is worth adding to your “BUY ON DIP” list.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in MITK.OB over the next 72 hours.