Who needs bank branches? Deposit checks via iPhone.

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    USAA, a privately held bank and insurance company, is launching an iPhone app feature that will let customers make deposits without having to stop at the ATM or stand in line at the bank.
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Bank of America may have been on the cutting edge of mobile banking via the iPhone, but now the United Services Automobile Association (USAA), a privately held bank and insurance company, is launching an iPhone app that will let customers deposit their checks electronically.

Starting this week, customers of the small bank, which is based in San Antonio, Texas, and largely caters to military personnel, will be able to make a deposit by simply taking photos of both sides of a check and sending it to the bank using their iPhone. The New York Times reports that customers who opt to deposit their checks via iPhone don't have to send the check to the bank because it will be handled electronically. Instead, they are encouraged to rip up or void the check or file it for their records.

USAA's iPhone deposit feature is the latest in the mobile banking frontier. There's no need to stand in line at the bank or drive up to an ATM. And despite the fact that the bank ranks below the top 20 banks in the US, it's the first to provide the service.

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Though customers were already able to deposit checks using a scanner for the past three years, according to The New York Times, mobile banking is an emerging technology – and one that could potentially save time and money.

"If banks can get people to stop calling call centers for mundane inquiries and instead send a text message," he said, "that saves a bank about $14 for every one of those inquires," Nick Holland, a senior analyst with Aite Group, a financial services research company, told The New York Times.

USAA launched their iPhone mobile banking app in May. So far, about a million of the bank's customers check their balances via cellphone. Bank of America isn't far behind: Over three million people access their accounts using mobile banking services, Tara A. Burke, a company spokeswoman, told the Times.

And it's a technology that's expected to grow from 10 million mobile banking users in 2009 to over 53 million users in 2013, according to Tower Group Inc., a research and advisory firm focused on financial services industry.

But some critics are skeptical of the USAA's iPhone deposit feature when it comes to security and fraud issues. To combat those concerns, USAA has limited the iPhone deposit feature to about 60 percent of its customers who have an eligible credit score and insurance from the bank.

Time will only tell if other banks will adopt similar technologies.

See a demo of USAA's iPhone deposit feature below.

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