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Image recognition system clears cheques in one day

All cheques paid in the UK will be cleared on the next working day once an image-based clearing system is fully rolled out

The roll-out of a cheque imaging system in the UK is reducing cheque clearing times from six working days to just one.

Not-for-profit industry membership body the Cheque and Credit Clearing Company (C&CCC) said the system would enable cheques to be cleared by the end of the next business day, rather than the six week days it currently takes, once the implementation is complete next year. 

The cheque imaging system will process “very few” cheques initially, but will increase gradually, with all cheques expected to be cleared using the system by summer 2018. Until then, the existing and new clearing systems will run in parallel, said the C&CCC, whose members include HSBC, Lloyds, Barclays, RBS and Nationwide.

The system will enable an image of the cheque, created by the bank or building society when the cheque is paid in, to be exchanged electronically between banks and building societies.

Although customers will still write cheques and deposit them in the same way, they will also be able to pay in cheques via an app if their bank offers such a service.

Read more about cheque processing

  • The UK government is expected to make the digital image of a cheque legal tender, paving the way to end paper cheque processing.
  • Barclays Bank pilots a scheme allowing customers to pay cheques into their accounts via pictures taken on their mobile phones.
  • Lloyds Bank is to allow customers to pay cheques in through their smartphones.

“If your bank or building society offers this service, as a personal or small business customer you will be able to image cheques you receive using a secure imaging tool on your mobile banking app and then upload the images for paying in and processing by your bank or building society,” said the C&CCC. 

Banks already offer customers app-based cheque payment services using imaging technology, and the new system will support the wider take-up in the industry.

While consumers might prefer this option, businesses and charities may use desktop scanners linked to their online bank account, provided by banks, to pay in any cheques they receive as digital images.

There have been questions over the future of the cheque, as digital technologies dominate payment methods and the use of cheques declines. But it is hoped that one-day clearing through image recognition will reduce processing costs and help cheques remain relevant.

James Radford, CEO of the C&CCC, said: “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.”

According to the C&CCC, 477 million cheques were used in 2016. With such ongoing demand, the government believes the payment method is worth investing in to bring it up to date.

Economic secretary to the treasury Stephen Barclay, MP, said: “The innovation of cheque imaging will help make them fit for the future by cutting clearing times and helping customers access their money more quickly.”

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