Lloyds Bank to trial smartphone cheque payment

Lloyds Bank is the latest finance firm to allow customers to pay cheques in through their smartphones

Lloyds Bank is the latest finance firm to allow customers to pay cheques in via their smartphones by taking a photo and sending it through an app, as part of a service to its business customers.

This is the latest example of a bank breathing new life into cheques through modern technology.

Barclays announced last week that it was expanding a trial of the technology. The bank has been piloting the scheme with thousands of customers since June but last week expanded the capability to one million customers.

Lloyds Bank said: Selected commercial customers are taking part in a pilot over several weeks so that their cheques can be cleared more quickly, and from anywhere, without the need to go into a branch or physically send on a paper version.” 

The maximum deposit is £2,500.

The test phase will to run for several weeks to help the bank understand what customers want with an expanded service expected in 2015. 

There were almost one and a half billion fewer cheques written in 2013 than in 2003, but 44% of consumers and 63% of businesses still use them, according to research.

UK consumers and business wrote a total of 718 million cheques in 2013, which was 68% lower than the 2.25 billion written ten years before.

"The 44% of consumers still using cheques do so to pay bills by post, tradespeople or clubs and societies, while the 63% of businesses use cheques to pay suppliers. Although their use continues to decline, many consumers and businesses are still choosing to use cheques in certain situations,” according to the Cheque and Credit Clearing Company.

The revival of the cheque comes years after the Association of Payments and Clearing Services (Apacs) – later replaced by UK Payments Administration Ltd – said in 2009 that 350 years would prove the cheque's last milestone. 

Speaking to Computer Weekly in 2009, a spokesperson at Apacs said: "It would be fair to say this is the last big birthday the cheque will celebrate," said the Apacs spokesperson. "More and more people are using automated payment methods or plastic."

Following the change in legislation in the first six months of 2015, HM Treasury will set out rules and timeframes.

A case study published last year by analyst Forrester estimated that US bank Redstone Credit Union saved $3.60 – or 90% – of the cost of processing each cheque, by enabling mobile deposit transactions.

In other words, while a branch transaction costs around $4.00, the equivalent digital cheque-style of transaction would only cost Redstone Credit Union $0.40 to process.



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