USAA seeks license fee for deposit tech
Officials at financial services giant USAA say their company developed the technology used by banks across the world to allow customers to deposit checks electronically, and it’s about time other institutions “pay their fair share.”
The San Antonio company is reaching out to banks and credit unions across the country offering a “licensing program” to pay for patented technology surrounding “remote deposit capture” capabilities it developed in 2005.
Online banking represented a sea change in the industry after Congress passed new laws in 2003 allowing lenders to handle more checks electronically — much like the ATM did when the first one was installed in London in 1967.
Mobile deposit, which came along a few years later, has been quickly adopted by consumers as more people use apps and websites to conduct financial transactions. Consumers wrote about 19.4 billion checks with a value of $27.3 trillion in 2015, according to the most recent statistics from the Federal Reserve Board in Washington. Financial services research and consulting firm Celent projected that about a third of all checks were deposited electronically in 2015 and about half last year.
USAA has sent out hundreds of letters seeking licensing fees for its intellectual property, which the bank says it has patented, and “asked banks and credit unions to reach out to us proactively to discuss the licensing program,” said Neff Hudson, vice president of corporate development at USAA. Hudson oversees USAA’s patent licensing portfolio.
So far it is unclear what impact this might have on the industry. Several banks that were contacted either declined to comment or did not respond. But if USAA is able to convince or cajole the industry into paying, it could be a windfall depending upon how the fees are structured.
USAA, which serves members of the military and their families, has about 50 patents associated with the technology, according to Hudson.
As for what banks might pay for the license, Hudson said that depends on “a couple of variables.” USAA is sharing its approach to pricing in conversations with banks to get feedback, he said.