Cheque payments will clear into recipients’ accounts in one working day, thanks to a new clearing system.
The image-based system will dramatically increase clearing times, which are currently up to one week.
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A number of banks have already launched the new clearing system, with the scheme set to take effect for every cheque payment from summer 2018.
What is cheque imaging?
The new imaging system for clearing is a major innovation in what had been seen to be a waning payment method.
Businesses and consumers will still be able to pay cheques in at a branch or ATM, and the two clearing systems will run in parallel until the new scheme is completely rolled out next year.
However some banks and building societies will also offer customers the opportunity to pay in cheques by taking a picture on their smartphone through a secure banking app, avoiding the need for a trip to the branch altogether.
The new clearing system marks the first major innovation in cheque payments since the method began 350 years ago.
Cheque and Credit Clearing Company chief executive James Radford said: “This is a momentous day in the history of the cheque. For more than 350 years the way cheques have cleared in this country has essentially remained the same.
“Now, with the introduction of cheque imaging, we are bringing the cheque into the 21st century, ensuring that it remains a secure, robust, and viable payment method.”
Cheques still in popular use
Despite rumours of the cheque’s death, it remains a popular method of payment in the UK, especially for small business owners like tradesmen.
According to Payments UK around 546 million cheques were written in 2015 – almost ten cheques a person each year. A report from the Telegraph suggested that they remain particularly popular amongst tradesmen and charities.
Despite this, MPs had planned to phase out cheques by 2018, but were forced to u-turn following pressure from industry.