An introduction of a faster, industry-wide, image-based cheque clearing system
The Cheque and Credit Clearing Company – the organisation that manages the cheque clearing system – has announced details of the launch of an industry-wide image-based cheque clearing system that will speed up cheque processing significantly for customers across the UK.
The new system will go live with some banks and building societies from 30 October 2017. Then, at some stage in the second half of 2018, all of the UK’s banks and building societies will clear all cheques via the image-based system to the faster timescale. Over time, increasing numbers of cheques will be cleared using the new system and more and more customers will benefit from the faster timescale, until such time in the second half of next year when all cheques will clear more quickly. The precise date as to when this will happen will be announced by the industry in due course. Banks and building societies will also advise their customers at the appropriate time regarding their individual roll-out plans.
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 23.59pm 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. Introduction of the new process will also mean that when a cheque is paid in, not only will the recipient receive the money in their account more quickly; the money will leave the account of the person or business that wrote the cheque to the faster timescale too.
Customers will still write cheques as they do today, and give or post them to recipients in exactly the same way as they always have. Cheque recipients will still be able to pay in cheques in the normal variety of ways, such as at a bank or building society, by post or at an ATM. This continuation of regular customer practice is particularly important for charities, which receive many donations via this payment method; and for any other people that may prefer to carry on using cheques in exactly the same way as they always have.
However, cheque imaging is also about providing more choice, and it means that some banks and building societies may offer their customers the additional option of paying-in an image of the cheque – by using a secure mobile banking app on their smartphone or tablet – rather than having to go to a bank to pay it in. Although this is likely to be a more convenient method for some, customers will still have the option of paying in cheques in exactly the same way as they do today, so there is absolutely no requirement for customers to use a smartphone or tablet to pay-in a cheque if they don’t want to.
Some banks have already rolled out imaging technology for some of their customers, but only for those situations where they receive a cheque from another customer of the same bank. However, providing customers with these new ways to pay in cheques is a competitive matter so not all banks and building societies will be offering them.
Ultimately though, the new system will see cheques from all banks and building societies cleared via image to the faster timescale, even when the cheque writer and cheque recipient are with different banks and building societies.
James Radford, CEO of the Cheque and Credit Clearing Company, said:
“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.“