In 2011, the UK Payments Council made the decision to close central cheque clearing, which many saw as a measure that would effectively ‘kill off’ the cheque. Serious concerns were raised by businesses and charities still reliant on the cheque for making and receiving payments, and the Government stepped in, confirming that the cheque would remain in existence for as long as customers still wanted to use them.
Now that the ‘good old dependable’ cheque is here to stay, the industry has been looking at ways to make the processing of cheques faster and more efficient.
On Boxing Day 2013, The Government announced that it was considering legislation that would make image based clearing possible. BBC News story below:
“Cheque imaging enables a wide range of benefits to consumers, businesses and the banking industry, including faster clearing times and greater customer convenience. The government (has) now introduced legislation in the Small Business, Enterprise and Employment Bill to enable the introduction of cheque imaging.”
The Cheque & Credit Clearing Company (C&CCCo) is a non-profit making industry body funded by the UK banking industry. It has managed the cheque clearing system in England and Wales since 1985 and in Scotland since 1996. C&CCCo is currently working on agreeing an implementation plan with all the relevant parties, to introduce industry-wide cheque imaging in the UK.
Commenting on cheque imaging, C&CCCo has said: “Clearing cheques via a ‘cheque imaging’ model appears to offer the most benefits for consumers and businesses. This system would mean that images of cheques are exchanged between the relevant banks, removing the need for the actual paper cheque to be transported physically around the country. One of the main benefits is that the cheque clearing process could be speeded up.”
James Radford, CEO of the Cheque & Credit Clearing Company, says these changes “will put cheques firmly in the 21st century” and “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”.
For customers, the new system will mean that if they pay in a cheque on a weekday they will be able to withdraw the funds by 23.59 on the next weekday (excluding bank holidays) at the latest, “with many banks and building societies likely to allow customers to access their funds earlier than this”.
Infographic courtesy of Cheque & Credit Clearing Company: 30 October 2017
The start of the phased roll-out of the new, image-based cheque clearing system that will speed up cheque processing significantly for customers across the UK began on 30th October 2017. This roll-out should be complete by the end of 2018.
In the meantime, individual banks are beginning to trial the remote deposit of cheques with their customers.
Advert courtesy of Barclays Bank showing one such trial
Video courtesy of Cheque & Credit Clearing Company