The UK sees the beginning of the phased roll-out of a new, image-based cheque clearing system that will cut the time taken to process a cheque from six weekdays to the next weekday.
Customers using the image based system will be able to withdraw the funds they processed the next weekday.
To begin with, the volume of cheques being processed through the new system will be small, with the Cheque and Credit Clearing Company operating two clearing systems in parallel until the system is adopted by all banks in the summer of 2018. Until then, some of the cheques processed will be cleared more quickly using the image based system, and others will still take up to six weekdays to clear.
James Radford, chief executive officer of the Cheque and Credit Clearing Company, said:
“This is a momentous day in the history of the cheque. For more than 350 years the way cheques have been cleared in this country has essentially remained the same.
“Now, with the introduction of cheque imaging, we are bringing the UK cheque into the 21st century, ensuring that it remains a secure, robust and viable payment method for the millions of charities, businesses and personal customers that still write or receive cheques on a regular basis.”
Customers will still write cheques as they usually do and recipients will still be able to pay them in using ATMs, bank branches or send them by post.
The new system also offers more choice in banking. Banks may decide to offer their customers the choice of using the image based system through a mobile banking app, rather than having to come into the branch to process it.