The UK is to roll out an image-based cheque clearing system in October that will slash processing times from six 'weekdays' to one day and pave the way for the introduction of interbank mobile cheque deposits.
Although cheque usage is in decline, 477 million were written in 2016. Previous attempts to abolish cheques caused political uproar and howls of protest from consumer groups and charities which still rely on paper-based donations.
Legislative changes to enable the passing of digital cheque imaging came into force in July 2016 and marked the onset of a number of bank trials of mobile cheque deposit systems for intra-bank clearing. Under the new system, banks will be able to accept and clear cheque images drawn from their peers.
James Radford, chief executive officer of the Cheque and Credit Clearing Company, which will oversee the introduction of the new system, says: “These changes will put cheques firmly in the 21st century, delivering real and important benefits for the many individuals, charities and businesses that regularly use cheques. Not only will cheques clear faster but banks and building societies may offer their customers the option of paying in an image of a cheque rather than the paper cheque itself.“
The new system will go live with some banks and building societies from 30 October, with the rest of the industry coming onboard by the second half of 2018.