Finovate Blog

ING Direct has brought a number of security innovations to the United States: 

• Password entry via pin pad instead of keyboard
• Trusteer “safe login” browser plugin (previous post)
• Challenge questions at login (when needed)

  Now add a fourth item to that list:

• Authorization required when a new book of paper checks is ordered (see update below)

ING Direct, which famously eschewed paper checks when it launched a checking account, Electric Orange, in 2007, recently began offering a paper-check option. True to form, ING Direct added a few twists to standard industry practices:

• Paper checks can be bought only in quantifies of 50
• Each order is just $5
• Only one set of 50 can be ordered at a time (but once they have been authorized, another set can be ordered)
• Before the checks can be used, the book of 50 must be activated online (similar to credit/debit card authorization)
• Because the order must be authorized, third-party paper checks will not work at ING Direct (another security improvement)

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How it works
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The bank isn’t exactly pushing paper checkbooks. There are no obvious links to the option on the primary or secondary navigation. Users must click on the Payments tab, then select Overview on the secondary navigation. That brings up a list of the ways to make payments, with “Checkbook” listed half-way down the page (see below).

New paper-check option at ING Direct (12 Aug. 2011)

And the bank’s order form is drop-dead simple, unlike most major banks which drop you to a third-party order-entry site.

One-click check-ordering process

Confirmation screen explains next steps

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My take
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Offering paper checks is a good move. Most U.S. customers still need the occasional paper check, and waiting 5 days for ING Direct to send one out on your behalf was slow and cumbersome.

And I really like the authorization feature. Since I was old enough to know about check fraud, I’ve always felt that a book of checks sitting in my mailbox was a bit disconcerting. This solves that worry.

Finally, the $5 per 50 pricing is consumer friendly and competitive. The lower quantity (compared to typical 150-200 orders) subtly discourages paper-check usage, but the price is in line with other financial institutions, which typically charge $15 to $25 per 200 checks (note 1).

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PS. ING Direct must be very close to launching remote check deposit. It has a “stay tuned” message posted under the “Deposit Checks” tab in secondary navigation (see below). 

ING Direct’s website implies that remote check deposit is coming soon (12 Aug. 2011)

Update (16 Aug. 2011): I heard from Citibank today. Apparently, they’ve used checkbook authorization for online account opening since 2007.

Notes:
1. And you can pay more: Chase recently dinged me for $23 for a book of 50 money-market checks (which I didn’t ask for) when I opened a new business savings account. In comparison, I earned $0.40 (before tax) in interest on the balance. That means it would take more than 7 years to earn enough interest to pay for the book of checks. But I’ll give Chase credit for immediately reversing the fee after I dropped the unwanted checks off at the branch. 
2. Apparently ING Direct changed its homepage navigation items earlier this year. The overall minimalist design remains unchanged. But now, in addition to View My Account, the bank offers three choices: Banking, Investing or Retirement. Previously, there were only two other choices: Open an account and Learn more.