ING Direct has launched a new feature of its mobile app that allows its customers to remotely deposit cheques into their bank account using a smartphone or tablet.

The Cheque-In feature, which has been available to ING customers as of yesterday, can be used on any smartphone or tablet using Apple, Android, BlackBerry 10 or Windows 8 platforms.

To deposit a cheque directly into an ING DIRECT account, all clients have to do is log into the ING mobile site, take a picture of the front and back of the cheque with their mobile device and enter the deposit information.

The cheque has to be in Canadian dollars and issued by a Canadian bank. Deposits were limited to $1,500 a day, $2,500 a week (on a rolling seven-day basis) and $5,000 a month (on a rolling 30-day basis), but at the urging of customers, ING increased them on June 20 to $20,000, $100,000 and $300,000, respectively.

"One of our commitments to Canadians is to make banking safe, simple and convenient to fit today's lifestyles," said ING's president and CEO Peter Aceto in a press release. "This [feature] means we can now deposit a cheque as soon as we receive it, without the hassle of going to a bank branch or ABM, and our money can start earning interest right away. This is a huge step forward for consumers, banks and the payments industry."

Credit unions also allow mobile deposits

ING is not the first Canadian bank to launch such a service. Vancouver-based credit union Westminster Savings launched a remote deposit feature on its mobile app in April that allows customers to deposit cheques using the camera on an iPhone or iPad, and other credit unions, including Meridian in Ontario and Affinity in Saskatchewan, have followed suit.

The larger Canadian banks are expected to eventually catch up with similar features.

Canada lags behind the U.S when it comes to processing payments electronically, ING said.

Canadian businesses and consumers write close to four million cheques on average every business day, but most of them are still physically handled multiple times as they move through the clearing and deposit system.

An ING survey found that more than half of Canadians deposit at least one cheque per month to their bank account, either by depositing it in an ABM (71 per cent), bringing it to a bank branch (41 per cent) or mailing it to their bank (one per cent).

The U.S., by contrast, has been processing cheques electronically since about 2004, and by 2009, 97 per cent of the 24.5 billion cheques paid were cleared electronically, according to a 2010 survey by the U.S. Federal Reserve.

The ability to process digital images of cheques rather than the paper object is estimated to have saved U.S. banks, businesses and consumers about $3 billion in 2010.

"Remote deposit capture is one of those rare opportunities that simultaneously deliver an improved customer experience, increased convenience and productivity improvements to the Canadian economy," said Steve Nogalo, vice-president and general manager of payments and multichannel of the NCR Corporation, which helped develop the Cheque-In technology for ING.

ING Direct has earned customer loyalty by branding its online banking system as a hassle-free alternative to the big banks with fewer fees and better interest rates for savers. But it was bought last year by Scotiabank, and some question whether it will be able to retain that loyalty while under the banner of one of the banks it positioned itself against.

ING launched its first chequing account, called Thrive, and debit card in 2010. Prior to that, deposits into ING accounts had to be made via a transfer from an existing chequing account at another bank.