14 February 2016

UK govt clears way for mobile cheque deposits

25 June 2014  |  9592 views  |  9 Barclays remote cheque deposit

The UK government is pushing ahead with legislation that will see Brits able to pay in cheques remotely by taking photographs with their phones.

The small business, enterprise and employment bill will see the law tweaked so that banks and building societies will be able process cheque images -rather than the physical paper - for the first time. The Treasury says the new rules should cut cheque processing times from six to two days.

The move means that banks will be able to offer their customers the option of paying in cheques by taking photos with their smartphones or tablets.

Although the use of cheques has been steadily falling over the last few years, they are still a crucial part of the British payments landscape, particularly for small businesses. Sole traders and other micro businesses continue to make over a fifth of their outgoing payments in cheques, says the government.

The technology has proved popular in the US. According to data compiled by Celent, some 20 million consumers used mobile remote deposit capture last year compared with 10.9 million in 2012. The analyst house predicts the mobile user base will increase to 33 million this year, 47 million in 2015, and 61 million by 2016.

Barclays, the first UK bank to pilot cheque imaging, has welcomed the news. Steven Roberts, director for transformation, says: "This is an opportunity to move cheques into the 21st century, to reduce costs and make banking easier and more convenient for customers."

Comments: (9)

Robin Setty
Robin Setty - ACI Worldwide (EMEA) Limited - Watford | 25 June, 2014, 17:14

This is good news, all round.  Quicker access to funds and no need to trek to branches with a piece of paper.  However, for those who aren't comfortable with new electronic payment methods, they still get to use a payment method that they trust.

Fraud (and stopping it!) will be the interesting discussion....


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Paul Love
Paul Love - Compass Plus - Nottingham | 25 June, 2014, 17:35

Is it time for Leonardo DiCaprio to make the sequel to "Catch Me If You Can"?

If  Frank Abagnale Jr. was around today would he target such cheque imaging systems. Would they be any less secure than the current system?

Perhaps it is time to use some smart logic on the image to authorise the cheque payment in real time. But maybe we are straying too far into the realms of fantasy. 

PS. I think cheques will be around for a while, but I note that cheque books are not issued automatically for many bank accounts.


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Keith Appleyard
Keith Appleyard - available for hire - Bromley | 25 June, 2014, 22:03

I hope the UK Banking Industry has taken pre-emptive steps to prevent the sort of fraud they've had in the USA - but somehow I doubt it.

Back in June 2013 Brian Krebs


reported on a criminal case where someone in Kentucky had used mobile remote deposit capture (mRDC) which allows banking customers to deposit a cheque by taking a picture of it with a cellphone. The risk for financial institutions that allow mRDC is that the customer retains the paper cheque, and can potentially deposit it again and again at other institutions. The key challenge for banks is that they can't detect in real-time when an item has been deposited via the mobile channel, and then deposited at a branch. 

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John Candido
John Candido - Black Cabs - Melbourne | 26 June, 2014, 06:46

Get rid of cheques they are a bloody nuisance. If you are going to have virtual cheques, why have them at all when you can transfer funds via electronic funds tansfer, BPay, or credit card & debit card payments using smartphones with PayPal, V.me, MasterPass or GooglePay? Peculiar stuff if you ask me.

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Tajinder Dhuria
Tajinder Dhuria - IDT Retail Europe Ltd - London | 26 June, 2014, 10:26

Future is paperless (no cheques). UK Banking Industry should be looking at other options available for replacing cheques. Technology has moved far ahead and waiting for 2 days to get paid is kind of a stone age.

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Robin Setty
Robin Setty - ACI Worldwide (EMEA) Limited - Watford | 26 June, 2014, 10:57

@Taginder & @John: For the likes of you, me and most Finextra readers, of course, paperless is the future.  But we're not a representative sample of the population.  In the UK, an attempt was made to end cheques by 2018, but it was vehemently rejected.

If I'm paying my kids' generation 'Y' babysitter, PayM etc... is probably a no-brainer.  If I'm paying their 70 year-old piano teacher, who has neither a smartphone nor a PC, paper is still the only option.  Time spent on familiarising with new technology would be better spent on scales and arpeggios!


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Keith Appleyard
Keith Appleyard - available for hire - Bromley | 26 June, 2014, 11:37

Cheques are very useful & efficient ways of paying a refundable deposit for the hire of outdoor equipment like bouncy castles etc. That way the cheque simply gets torn up afterwards, and no transaction charges are incurred by either party.

Whilst I can pay my local council by Direct Debit or BACS, they still don't accept Credit/Debit Cards. If I instigate a transaction with them, where they don't know beforehand I'm coming and so haven't prepared an Invoice, such as for a Liquor License or Car Parking Permit, then I have no choice other than to pay them by Cheque.

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Glen Fossella
Glen Fossella - CTS North America - Charlotte | 26 June, 2014, 17:39

The fraud risk around mobile deposit is minimal, and the US stats show that. Depositors are imaging and depositing checks into their own accounts, and so are known to the bank of deposit. The fellow in Kentucky was caught in about five minutes. Think about it: it's like robbing the liquor store, but on your way out showing the clerk your ID to prove you are of age!

The UK is way ahead of the US with C2B and P2P payment technology and clearing speed. It seems to me this is a good transitional step for B2B payments, especially for small/medium enterprises.

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 27 June, 2014, 12:47

From eating crow about banning cheques a couple of years ago to making it easier to handle cheques - at last, better sense has prevailed! With a doubling in usage in one year, Mobile RDC has indeed proven to be the killer mobile banking app that I'd predicted. In all the time and trouble I've taken doing ePayments, I could've processed many more cheques with Mobile RDC.

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